Bitcoin (BTC) has struggled to break above the $70,000 mark, even after a record-breaking inflow of $20 billion into spot Bitcoin exchange-traded funds (ETFs). While this milestone was achieved in just 10 months, the impact on Bitcoin’s price has been delayed.
Delayed Effect of ETF Inflows
Market analysts attribute the delayed effect of ETF inflows to several factors. Firstly, these inflows can take a few days to impact the spot BTC price. Secondly, some traders may be using ETF flows as exit liquidity for their trades, leading to a muted impact.
Despite the delayed impact, positive ETF inflows could still be bullish for Bitcoin. In the past, significant inflows have helped drive the price higher. For instance, United States-based spot BTC ETFs accounted for 75% of new investment in the cryptocurrency just one month after their launch, contributing to a price surge above $50,000.
Also Read: Bitcoin Open Interest Hits $40.5 Billion As BTC Soars Near $70K – What This Means For Altcoins!
BlackRock ETF Leading the Way
BlackRock’s iShares Bitcoin Trust ETF has been a major contributor to the ETF inflows, bringing in over $1.17 billion worth of Bitcoin in the past week. However, even with these substantial inflows, the price impact has been limited on several occasions.
Delta-Neutral Trading and Price Impact
A portion of the recent ETF inflows could be attributed to delta-neutral trading strategies, which can also contribute to a muted price impact.
Despite the current price stagnation, there is still optimism for Bitcoin’s future. A weekly close above $69,000 could set the stage for a rally to retest the re-accumulation range of above $71,000. Additionally, the approval of Bitcoin ETF options in the US could further bolster positive inflows and support a price increase.
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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