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In summary
- Bitcoin ETFs saw an inflow of $870 million yesterday, as the price of the Cryptocurrency approached a new all-time high.
- BlackRock’s iShares Bitcoin Trust (IBIT) recorded trading volume of $3.36 billion, the highest in six months.
- Bloomberg Intelligence analyst Eric Balchunas explained that the increase in ETF volume was due to institutional FOMO.
Bitcoin ETFs saw a staggering $870 million inflow yesterday, as the cryptocurrency’s price came dangerously close to setting a new all-time high.
BlackRock’s iShares Bitcoin Trust (IBIT) recorded a staggering $3.36 billion in trading volume yesterday, the highest in the last six months. At the time of writing, the IBIT fund has $17.2 billion in Bitcoin under management, according to Coinglass.
But it’s not normal for ETF volumes to skyrocket when the price is rising, Bloomberg Intelligence analyst Eric Balchunas explained on Twitter.
“Typically, ETF volume increases in a crash/crisis,” he noted, adding that yesterday’s big increase is more likely due to institutional FOMO (fear of being left out of investing).
And it’s easy to see why. In the last 24 hours, the price of Bitcoin came within $175 of setting a new record above its previous all-time high of $73,737.94 on March 14.
At press time, Bitcoin is trading around $71,740, up 0.8% on the day and 8.1% on the week, according to data from CoinGecko.
Traders now have their sights set on the new US nonfarm payrolls report, or NFP, due out on Friday. That’s a key economic indicator that would greatly influence whether the Federal Reserve sees fit to once again lower interest rates, according to Singapore-based cryptocurrency trading firm QCP Capital.
“This week’s focus is on Friday’s NFP report, a critical indicator of the health of the US labor market, with consensus estimates around 110k, about half the previous figure,” the firm wrote. in a trading note on Wednesday. “As the last major data release before next Friday’s Fed meeting, the report is expected to solidify market bets for the Fed’s next move.”
Those bets, as captured in the CME FedWatch tool, show that 99.6% of traders expect the Federal Reserve to cut rates again, lowering them by 25-50 basis points.
But in the short term, investors are watching today’s gross domestic product report from the Bureau of Economic Analysis. The report shows that US GDP rose 2.8% in the third quarter, following a slight slowdown from the 3% reported in the second quarter.
“Bitcoin appears to have entered an acceleration phase, aligning with expectations around the presidential election and other favorable catalysts,” wrote BRN analyst Valentin Fournier, pointing to the GDP release. “With Bitcoin approaching its ATH, strong resistance could present a challenge, but current momentum and favorable catalysts could drive a breakout of the ATH. We recommend remaining heavily invested, with a preference for Bitcoin over Ethereum.”
Edited by Stacy Elliott.
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