The BlackRock Bitcoin ETF (IBIT) has experienced an unprecedented surge in inflows, surpassing $1 billion in a single day on November 7, following the Federal Reserve’s decision to cut interest rates by 25 basis points. This move boosted liquidity in the ETF market, with total inflows for IBIT now exceeding $27 billion since its launch in January 2024, making it one of the best-performing ETFs of the year.
Record Inflows and Market Impact
On November 7, Bitcoin ETFs saw total inflows of $1.371 billion, with the BlackRock Bitcoin ETF alone adding 14,607 BTC, which accounts for the majority of the day’s record inflow. The ETF’s trading volume also spiked to $1.8 billion, highlighting its growing influence in the market. As of now, IBIT holds 447,281 BTC, pushing its assets under management to over $34 billion, surpassing even Michael Saylor’s MicroStrategy, which holds 252,220 BTC.
Fed Rate Cut as a Liquidity Catalyst
The Fed’s rate cut has played a significant role in driving up Bitcoin ETF inflows, acting as a liquidity catalyst. The announcement of the 25-basis-point cut on November 7 spurred bullish sentiment in the market, particularly among institutional investors. In addition, the victory of Donald Trump in the US Presidential Election has further fueled optimism, leading to inflows surpassing $2 billion in just two days.
Bitcoin Price Reaches New Heights
Amid the strong ETF inflows, Bitcoin’s price has also surged, hitting a fresh all-time high of $79,943. The price action has shown a 2% increase on the day and nearly 10% gains over the week, reinforcing the bullish momentum. Analysts are now eyeing the $100,000 price level, with increasing optimism about the future of Bitcoin.
Discussions about a potential US Bitcoin reserve have also gained traction, with lawmakers like Wyoming Senator Cynthia Lummis advocating for the creation of a strategic Bitcoin reserve, which could further bolster Bitcoin’s institutional appeal.
Conclusion
The combination of institutional ETF demand, favorable interest rate cuts, and political developments has set the stage for a Bitcoin price rally, with many predicting that the $100,000 mark could be within reach.
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