Yahoo Finance Bitcoin price holds above $70,000 as money flows into ETFs
The price of bitcoin has held above $70,000 (£55,591) in early trading on Thursday, as money flowed into spot bitcoin exchange-traded funds (ETFs).
Every day this week so far has witnessed net positive inflows into spot bitcoin ETFs from fund managers such as BlackRock (BLK) and Franklin Templeton (BEN). On Monday, there were inflows of $15m, while Tuesday and Wednesday saw inflows of $418m and $243m, respectively.
Read more: What is a spot bitcoin ETF and why it has sparked a crypto rally?
This is a reversal from last week, which witnessed outflows from Monday to Friday. These outflows significantly contributed to bitcoin's price (BTC-USD) decline from its all-time high of over $73,000 on Thursday, 14 March, to a low of around $61,000 in the middle of last week.
The downward pressure throughout last week was largely a result of increased selling of the Grayscale Bitcoin Trust ETF (GBTC). Every day last week saw significant spot bitcoin ETF outflows, with Tuesday, 19 March, recording the largest outflows at £326m.
Read more: Crypto live prices
Analysts think that the large-scale selling off of GBTC could be approaching exhaustion. If that is the case, and the sell-offs stop. This combined with the upcoming bitcoin halving event anticipated in April, could see prices start going up again.
According to blockchain analysis firm Arkham Intelligence, the Grayscale Bitcoin Trust (GBTC), which holds more than 347,000 bitcoin at a value of roughly $24.6bn, is selling at a pace that will see it "run out for good" in just 14 weeks.
The influx of capital from the traditional finance sphere into spot bitcoin ETFs is acting as a major price catalyst for the digital asset, but it is not the only one. The consensus among analysts is that the upcoming 'bitcoin halving' could continue to drive inflows into the bitcoin market.
Read more: Bitcoin ETFs poised for US pension plan inflows, Standard Chartered analyst says
The bitcoin halving is an event that happens about every four years and is expect to happen again this April. The halving will reduce the bitcoin reward that miners receive for validating blocks on the blockchain from the current 6.25 BTC to 3.125 BTC. This could act as a supply crunch for the digital asset, potentially leading to a price appreciation.
Investors 'need bitcoin in their portfolio'
According to Maconomics CEO Ross Mac, bitcoin is a necessary asset in investors' portfolios despite its volatility. Speaking to Yahoo Finance Live, Mac emphasised that bitcoin should "absolutely" be part of an investor's portfolio, describing it as "a more diversified approach" than traditional asset classes.
He noted that with bitcoin gaining exposure to institutional investors it may become "a lot less volatile moving forward." Mac calls Bitcoin one of the "greatest technological advancements" of our time, alongside artificial intelligence and the internet.
Read more: Crypto live prices
He added that since its inception, bitcoin has fallen 50% a total of eight times, yet each time has recovered and reached new highs. However, he stresses that "it's a long-term hold," and investors venturing into crypto should be comfortable with volatility, although he suggests that the new ETFs should create more stability.
Chances of spot ether ETF approval drop
The global cryptocurrency market today stands at $2.79tn, an increase of 1.5% in the past 24 hours. Bitcoin makes up 48.9% the overall cryptocurrency market, whilst the second largest currency, ether, (ETH-USD) accounts for 15.4%, according to CoinGecko data.
Ether has under-performed bitcoin in the past week, up only 0.4% compared to bitcoin's 5% increase. Ether is facing challenges stemming from uncertainty surrounding the potential approval of a spot ETF by the US Securities and Exchange Commission (SEC) before a May deadline.
According to analysts from Bloomberg, the chances of a spot ether ETF being approved by the SEC in May have decreased. The Bloomberg ETF analysts cited US financial regulators' seeming lack of engagement with potential issuers over the products.
“We now believe these will ultimately be denied on May 23rd for this round,” Bloomberg Intelligence ETF analyst James Seyffart wrote in a post on X on Tuesday. Seyffart and his colleague Eric Balchunas had previously given 35% odds for approval in May.
Another major altcoin, Solana (SOL-USD), has also drifted downwards compared to bitcoin's recent rally, falling by over 1% in the past week.
Watch: What is a spot bitcoin ETF and why it has sparked a crypto rally? | Future Focus
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