Bitcoin (BTC) experienced a significant price surge early Tuesday, surpassing the $61,000 mark. This rally comes on the back of robust inflows into U.S.-based spot exchange-traded funds (ETFs) holding Bitcoin, signaling growing institutional interest in the leading cryptocurrency.
ETF Inflows – A Strong Indicator
According to data from SoSoValue, Bitcoin ETFs recorded over $61 million in net inflows on Tuesday, the highest since the $192 million peak on August 8. Leading the charge was BlackRock’s IBIT, which saw inflows of $92 million. On the other hand, Bitwise’s BITB ETF experienced outflows of $25 million, highlighting the varied investor sentiment across different funds.
The inflows are a clear sign that institutional investors are regaining confidence in Bitcoin, particularly as it breaks through key psychological levels. The renewed interest in Bitcoin ETFs may also be tied to broader market movements and investor speculation around upcoming regulatory and monetary policy announcements.
Adding to the bullish sentiment, Japan’s Metaplanet announced the completion of a Bitcoin purchase worth $3.4 million (500 million Japanese yen). This acquisition brings Metaplanet’s total Bitcoin holdings to 360.368 BTC, reinforcing the trend of global institutional adoption.
The move by Metaplanet underscores the growing recognition of Bitcoin as a valuable asset among major financial entities, even amid ongoing regulatory uncertainties in various markets.
Market-Wide Reactions
The positive momentum in Bitcoin has had a ripple effect across the broader cryptocurrency market. Major tokens such as XRP and BNB surged by over 7%, while Solana (SOL) and Cardano (ADA) recorded gains of 4%. However, not all tokens followed suit; Toncoin (TON) saw a slight decline of 0.8% over the past 24 hours.
The CoinDesk 20 (CD20), an index tracking the performance of the largest and most liquid digital assets, also rose by 4.25%, reflecting the overall bullish sentiment in the market.
Meanwhile, Dogecoin (DOGE) experienced a 5% jump after technology entrepreneur Elon Musk posted an AI-generated image referencing the meme token on social media platform X. Historically, DOGE has been highly reactive to Musk’s posts, though such price spikes are typically short-lived.
Market Outlook Ahead of Jackson Hole
As the week progresses, market participants are eyeing the upcoming Jackson Hole symposium, where Federal Reserve Chair Jerome Powell is expected to provide insights into future monetary policy. According to Abra Prime, Bitcoin is likely to see horizontal price action, ranging between $56,000 and $62,000, until more clarity is provided at the symposium.
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Traders are particularly focused on Powell’s expected confirmation of a pivot to lower borrowing costs, a move that has historically buoyed risk assets like Bitcoin. However, short-term bearish sentiment persists, particularly in light of recent withdrawals by NYSE and NASDAQ of their applications to list Bitcoin ETF options, adding headwinds to broader mainstream adoption.
The recent price movements and ETF inflows highlight the dynamic nature of the cryptocurrency market, where institutional interest and global economic factors continue to play a pivotal role. As the market anticipates key developments later this week, Bitcoin’s performance remains closely tied to broader economic signals and investor sentiment.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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