Bitcoin is on the verge of hitting a two-month high, nearing the $69,000 mark, propelled by significant inflows into spot exchange-traded funds (ETFs) and a sharp increase in short liquidations.
As of now, Bitcoin is trading at approximately $67,739, reflecting a 0.6% rise in the last 24 hours. The cryptocurrency boasts a market capitalization of around $1.33 trillion, supported by a daily trading volume nearing $30 billion.
Short Liquidations Drive Price Surge
According to data from Coinglass, short liquidations have been instrumental in driving Bitcoin’s recent price surge. In the past day, short liquidations reached $17.91 million, outpacing long liquidations, which amounted to $11.8 million. This reversal is indicative of a common market phenomenon where the necessity to cover short positions heightens demand, resulting in upward price pressure on Bitcoin.
Strong Inflows into Spot Bitcoin ETFs
Complementing the market dynamics, U.S.-based spot Bitcoin ETFs have witnessed remarkable inflows. Over the past week, these funds experienced five consecutive days of net inflows totaling over $2.12 billion, with an impressive $294.29 million recorded at the start of the week.
On October 24, data from SoSoValue revealed that spot Bitcoin ETFs garnered net inflows of $188.11 million, primarily driven by BlackRock’s IBIT ETF, which alone attracted $165.54 million. This marks the ninth straight day of inflows for BlackRock’s ETF, accumulating nearly $2 billion during this timeframe.
In addition, Bitwise’s BITB ETF saw $29.63 million in inflows, rebounding after a previous outflow of $25.2 million. In contrast, Grayscale’s GBTC ETF recorded outflows of $7.05 million, continuing a trend of over $20 billion in withdrawals since its inception.
Since the launch of the first spot Bitcoin ETFs in January, the 12 available products have collectively amassed $21.53 billion in net inflows—a milestone highlighted by Bloomberg ETF analyst Eric Balchunas as exceptionally challenging to achieve within the ETF realm. Balchunas pointed out that it took gold ETFs five years to reach similar figures, underscoring the rapid institutional appetite for Bitcoin investment.
Political Factors and Future Prospects
The broader political landscape in the United States is also influencing Bitcoin investor sentiment. Speculation regarding a potential victory for Donald Trump in the upcoming presidential election has generated optimism among Bitcoin advocates. They believe a pro-crypto administration could foster blockchain innovation and alleviate regulatory challenges.
Trump’s policy positions, which promote a blockchain-friendly regulatory environment and the possible removal of SEC Chair Gary Gensler, resonate with many institutional investors seeking reduced regulatory oversight. This anticipated shift could further fuel Bitcoin’s upward momentum by creating a more favorable regulatory landscape for cryptocurrency growth.
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