By Michael Scott
QCP Capital experts forecast that Bitcoin ETF options are the catalyst for granting Bitcoin ETFs the requisite liquidity for sustainable inflows.
QCP Capital analysts observe that Bitcoin ETFs are experiencing a surge in inflows. The experts consider the momentum is yet to slow down.
BlackRock Inflows Emerge Top
In a recent publication, QCP Capital attributes the upward trajectory in inflows to an interplay of several factors. The analysts attribute the surge to solid institutional demand and investor confidence in BTC as a desirable asset class and conducive market conditions.
Bitcoin ETFs realized the third-largest net inflows in its history of $2B. The weekly inflow saw BlackRocks IBIT ETF lead the charge with a $1B inflow. Fidelity’s (FBTC) ETF ranked second with $319M inflows.
Ethereum ecosystem also realized some critical gains with the spot ETFs, which accomplished a $79M inflow per SoSo value data.
Bitget Research lead analyst Ryan Lee observes a six-day inflow streak. The chief analyst attributes the inflow to the uptick in institutional interest.
Lee explains that the primary drivers are the Grand Old Party (GOP) candidate Donald Trump winning the November election. Such could catapult the price of Bitcoin to rebound.
Is Bitcoin ETF Options Listing Fueling Inflows?
QCP Capital echoes such sentiments, highlighting the Bitcoin ETFs realized $203M inflows on Friday trade. The firm’s analysts attribute the huge inflow to the greenlight granted by the US Securities and Exchange Commission (SEC) to the listing of Bitcoin ETF options. As such, the products are now listed on the New York Stock Exchange (NYSE). The move is predicted to stimulate additional liquidity into the Bitcoin.
QCP Capital predicts that the Gary Gensler-led SEC approving ETF options will trigger an inflow of requisite liquidity for sustainable inflows.
The analysts consider the primary catalyst that will sustain inflows into the Trump Trade. Data from the prediction platform Polymarket illustrates that Trump is the leading candidate with 61.4% against Kamala Harris’ 39%.
The crypto market participants consider Trump’s potential reelection a key industry win. He reiterates favorable attitudes towards crypto as promised by his administration.
Trump has transformed from a Bitcoin critic to a supporter. His improving odds of pulling a victory next month is a positive signal for the crypto market. Lee recounts Trump’s sentiments during the Nashville Bitcoin Conference, urging BTC holders against selling, which has fueled optimism among investors.
Lee highlighted that BTC realized a massive rebound off the $58k support base to generate momentum that lifts it shy of $70K. The price rebound prompts an inflow of additional funds into the asset.
What is Supercharging Trump Trade?
BitsCruch chief Vijay Maharajan notes that the market is gradually becoming more favorable as sentiment becomes more favorable. Notably, the change of fortune is evident in the sharp increment in the Crypto Fear and Greed Index from 38 to 72 in a few weeks.
Maharajan acknowledges the existence of a strong uptake in risk assets, among them Bitcoin. He adds that geopolitical developments led by de-escalating conflict within the Middle East can further enhance the positive sentiment.
Maharajan forecasts that Bitcoin could garner bullish steam to blast past the previous peak of $73,850 by early next month. The executive is optimistic that BTC will surpass $100,000.
Bernstein Research echoes the idea of sustained Bitcoin ETF inflows, illustrating that $2B were fresh purchases executed last week. The report considers the stream brought the year-to-date inflows to $20.5B.
With the total assets under management (AUM) surpassing $63B, Bernstein Research analysts consider the inflows fuel demand for BTC in the spot market.
Bernstein reports that incremental ETF inflows are responsible for the spot demand, with asset managers now prioritizing the distribution to the wirehouses and wealth advisors.
Bernstein notes the shift is evident from the demand driven by arbitrage traders and hedge funds. The shift is set to contribute to the stable and sustainable inflows into the BTC ETFs.
Bitfinex analysts attribute the inflow surge to a broader trend of institutional adoption of BTC. Also, they link the expectations of an improved regulatory environment post the US elections as fueling the demand.
Bitfinex analysts warn that inflows hardly translate to sustained price increases. The previous efforts for BTC to surpass the $70,000 level have failed despite large ETF inflows.
The historical volatility witnessed in BTC prices shows the possibility of further fluctuations. Bitfinex analysts anticipate a price tumble in the future despite the huge inflows bolstering confidence in BTC ETFs as viable investments.