Last week Dispatch called for a potential Bitcoin rejuvenation of sorts. Fittingly for our publication’s editorial desk, Bitcoin crossed $30,000 for the first time in months on Saturday evening, before continuing its attack towards a 2023 peak of $35k, where it settled. Stellar performance from both BTC – and the Dispatch intern 😉 – to bounce off the current bottom.
And with the former closing the week with its 20% gains intact, there were a few fundamental unfoldings worth exploring as the Fear and Greed index flipped virtually overnight (from 44 in September to 70 currently) creating levels of open interest on market places rarely seen in months.
Еxcitement surrounding the potential approval of spot Bitcoin ETFs, catalyzed by BlackRock's involvement, has played a significant role. In anticipation of ETF approvals and the expected surge in demand, asset management firms accumulate Bitcoin, leading to substantial Bitcoin outflows from exchanges. A closer inspection reveals that around 20,000 BTC have left exchanges in the few days leading up to the latest rally, with a significant portion of transactions being over $10M. Moreover, Bitcoin-related investment products have seen net inflows over the last four consecutive weeks of around $180M.
This livened up trading activity, as Bitcoin's futures open interest on the Chicago Mercantile Exchange (CME) reached $3.4B. In addition, $180M in short positions were liquidated as the price rally took center stage – possibly a bear-capitulating event that allowed BTC to settle above $30K.
So, with the combination of high expectations and substantial corporate capital, the situation oddly resembles the environment in the big-tech stock market.
Could the role of a spot Bitcoin ETF be to become the most technologically advanced tradable asset globally?
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The Great Bitcoin Move
Bitcoin supply across exchanges stands at just above 2.3M coins according to data from Glassnode to mark a bottom since April 2018. A notable decline in recent months also corresponds with the hype around spot Bitcoin ETFs. That’s all the validation some need.