Investors FOMOing Into Bitcoin ETFs As Price Eyes New Highs

Investors FOMOing Into Bitcoin ETFs As Price Eyes New Highs


A BlackRock
exchange-traded fund (ETF) investing in Bitcoin (BTC) saw record inflows of
$520 million on Wednesday, marking the largest daily intake for any US ETF
across asset classes so far this year.

All this
comes as the price of BTC tests $64,000 and is just a step away from its
historical highs of 2021. The market is currently dominated by speculative
frenzy, and “greed” is at a level never seen before.

The
BlackRock iShares Bitcoin Trust (IBIT) has seen steady investor demand,
registering 32 consecutive days of inflows. As of Wednesday, nine Bitcoin spot
ETFs combined saw trading volume over $2.6 billion, with IBIT breaking its own
record at $1.5 billion.

The surge
of investments into Bitcoin ETFs comes amidst a broader rally in cryptocurrency
prices. BTC hit a two-year high on Wednesday, nearing its all-time record,
while other major digital assets like Ethereum also saw significant gains.

Analysts
say the successful launch of Bitcoin spot ETFs in January 2024 has opened the
door to fresh investments from wealth managers, hedge funds, and retail
traders. The ease of trading BTC via ETFs is helping drive its price higher
by boosting demand.

Bitcoin price. Source: CoinMarketCap

“The market is waking up to the fact that
Bitcoin is now easily accessible to the masses and that we are only just
scratching the surface as far as mainstream adoption goes,” said Joel
Kruger, the Market Strategist at LMAX Group. “We also believe there has
been plenty of excitement around lower correlations with US equities, which
makes Bitcoin all the more attractive as an investment for portfolio
diversification.”

Clearly, the demand for leverage in the cryptocurrency market is influencing investors’ behavior. Higher costs in the futures market and decentralized finance are leading to an increased need for crypto borrowing.

“Investors are increasingly seeking avenues to obtain liquidity in a high-rate environment, prompting them to turn to lending platforms that offer lending and futures services within an easily navigable interface,” commented Andrey Stoychev, the Project Manager at Nexo. “The demand for borrowing in familiar settings is not just a reflection of the market’s adaptability to external economic factors but also leads to a significant trend in the cryptocurrency ecosystem.”

WisdomTree European BTC
ETPs Exceed $500 AuM

Another
issuer of exchange-traded instruments, WisdomTree, reported record
results. Its European cryptocurrency exchange-traded products (ETPs) have
surpassed the $500 million mark in assets under management. This figure marks a
historic peak for WisdomTree’s European crypto ETPs, which have experienced net
inflows of $59 million into their portfolio in 2024, predominantly driven by
WisdomTree Physical Bitcoin.

According
to market experts, the inflows have been primarily driven by retail investors
rather than institutions. As more financial advisors get approved to offer
Bitcoin ETFs to clients, analysts expect volumes to increase over the
next year.

“The
launch of spot bitcoin exchange-traded funds in the US has changed the way many
investors look at cryptocurrencies as an investable asset class,” Alexis
Marinof, the Head of European branch of WisdomTree, said. “As attention
turns to the Bitcoin halving expected in April, investors are seeing more
potential within the asset class.”

Greed Is Everywhere

BTC’s price has more than doubled over the last few months, recently exceeding $64,000. This
rapid price growth has led to euphoric sentiment, with the crypto fear and
greed index reaching its highest level (86) since BTC hit its previous
all-time high of around $69,000 in November 2021.

Crypto Fear and Greed Index. Source: CoinMarketCap

This index
ranges from 0 to 100, with 0 representing “extreme fear” and 100
representing “extreme greed.” A high index level signals that
investors are becoming overly greedy, believing that cryptocurrency prices will
continue to rise. This often precedes a market correction as prices eventually
become detached from fundamentals.

Some
analysts argue that such high greed signals that the crypto market is due for a
correction, as excessive optimism generally foreshadows a price reversal. Ultimately,
while extreme greed suggests crypto prices have significant room to fall, the
durability of current market optimism makes the exact timing of a correction
challenging to predict.

A BlackRock
exchange-traded fund (ETF) investing in Bitcoin (BTC) saw record inflows of
$520 million on Wednesday, marking the largest daily intake for any US ETF
across asset classes so far this year.

All this
comes as the price of BTC tests $64,000 and is just a step away from its
historical highs of 2021. The market is currently dominated by speculative
frenzy, and “greed” is at a level never seen before.

The
BlackRock iShares Bitcoin Trust (IBIT) has seen steady investor demand,
registering 32 consecutive days of inflows. As of Wednesday, nine Bitcoin spot
ETFs combined saw trading volume over $2.6 billion, with IBIT breaking its own
record at $1.5 billion.

The surge
of investments into Bitcoin ETFs comes amidst a broader rally in cryptocurrency
prices. BTC hit a two-year high on Wednesday, nearing its all-time record,
while other major digital assets like Ethereum also saw significant gains.

Analysts
say the successful launch of Bitcoin spot ETFs in January 2024 has opened the
door to fresh investments from wealth managers, hedge funds, and retail
traders. The ease of trading BTC via ETFs is helping drive its price higher
by boosting demand.

Bitcoin price. Source: CoinMarketCap

“The market is waking up to the fact that
Bitcoin is now easily accessible to the masses and that we are only just
scratching the surface as far as mainstream adoption goes,” said Joel
Kruger, the Market Strategist at LMAX Group. “We also believe there has
been plenty of excitement around lower correlations with US equities, which
makes Bitcoin all the more attractive as an investment for portfolio
diversification.”

Clearly, the demand for leverage in the cryptocurrency market is influencing investors’ behavior. Higher costs in the futures market and decentralized finance are leading to an increased need for crypto borrowing.

“Investors are increasingly seeking avenues to obtain liquidity in a high-rate environment, prompting them to turn to lending platforms that offer lending and futures services within an easily navigable interface,” commented Andrey Stoychev, the Project Manager at Nexo. “The demand for borrowing in familiar settings is not just a reflection of the market’s adaptability to external economic factors but also leads to a significant trend in the cryptocurrency ecosystem.”

WisdomTree European BTC
ETPs Exceed $500 AuM

Another
issuer of exchange-traded instruments, WisdomTree, reported record
results. Its European cryptocurrency exchange-traded products (ETPs) have
surpassed the $500 million mark in assets under management. This figure marks a
historic peak for WisdomTree’s European crypto ETPs, which have experienced net
inflows of $59 million into their portfolio in 2024, predominantly driven by
WisdomTree Physical Bitcoin.

According
to market experts, the inflows have been primarily driven by retail investors
rather than institutions. As more financial advisors get approved to offer
Bitcoin ETFs to clients, analysts expect volumes to increase over the
next year.

“The
launch of spot bitcoin exchange-traded funds in the US has changed the way many
investors look at cryptocurrencies as an investable asset class,” Alexis
Marinof, the Head of European branch of WisdomTree, said. “As attention
turns to the Bitcoin halving expected in April, investors are seeing more
potential within the asset class.”

Greed Is Everywhere

BTC’s price has more than doubled over the last few months, recently exceeding $64,000. This
rapid price growth has led to euphoric sentiment, with the crypto fear and
greed index reaching its highest level (86) since BTC hit its previous
all-time high of around $69,000 in November 2021.

Crypto Fear and Greed Index. Source: CoinMarketCap

This index
ranges from 0 to 100, with 0 representing “extreme fear” and 100
representing “extreme greed.” A high index level signals that
investors are becoming overly greedy, believing that cryptocurrency prices will
continue to rise. This often precedes a market correction as prices eventually
become detached from fundamentals.

Some
analysts argue that such high greed signals that the crypto market is due for a
correction, as excessive optimism generally foreshadows a price reversal. Ultimately,
while extreme greed suggests crypto prices have significant room to fall, the
durability of current market optimism makes the exact timing of a correction
challenging to predict.





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