On May 8, Bitcoin surged past the $100,000 mark once again, reflecting a growing trend of institutional investment in the cryptocurrency market. Notably, Farside Investors’ data indicated that spot Bitcoin exchange-traded funds (ETFs) experienced cumulative net inflows of $142.3 million on May 7. This surge is seen as indicative of ‘sustained institutional interest,’ according to Alex Obchakevich, founder of Obchakevich Research.
Obchakevich noted that these inflows demonstrate the ongoing accumulation of Bitcoin (BTC) by institutional players, including hedge funds and asset managers, who are utilizing regulated investment instruments to acquire the cryptocurrency.
The ARK 21Shares Bitcoin ETF (ARKB) led the charge with $54 million in inflows, followed closely by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with $39 million, and BlackRock’s iShares Bitcoin Trust (IBIT) at $37 million. Adding to this narrative, BlackRock made headlines by acquiring over 86 BTC, valued at $8.4 million in a single transaction on the same day.
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ETF Inflows Indicate Bullish Momentum
Continuing the trend, Bitcoin ETFs saw inflows totaling over $117 million on May 8, primarily led by IBIT with $69 million, followed by FBTC at $35 million and ARKB at $13 million. Obchakevich pointed to the emerging correlation between Bitcoin and tech stocks, noting a correlation coefficient of 0.75 with the Nasdaq index. This suggests that sentiment within the tech market significantly influences Bitcoin’s performance.
The positive momentum of the Nasdaq during May 8-9 contributed to Bitcoin’s rise above the $100,000 threshold, providing a favorable backdrop for continued investment.
Obchakevich emphasized that the strong inflows witnessed since May 2, which peaked at $675 million for IBIT, likely herald a continuation of bullish sentiment among institutional investors unless significant macroeconomic or geopolitical disruptions occur.
The persistent trend of institutional buying suggests confidence in Bitcoin’s future, implying a steady increase in investment activity moving forward.
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Understanding Grayscale Bitcoin Trust’s Unique Position
Obchakevich highlighted that the absence of substantial outflows from key ETFs other than the Grayscale Bitcoin Trust (GBTC) supports the notion of ongoing bullish sentiment among major investors. In contrast, the GBTC has seen notable outflows, attributed to various factors such as high management fees of approximately 1.5%, prompting investors to shift towards more cost-effective alternatives. This situation affects Bitcoin’s price dynamics and market perception.
He indicated that the reasons behind GBTC outflows are complex, especially given the ongoing global political tensions and uncertainty, which could diminish investor confidence in this particular fund.
The fluctuation in GBTC’s inflows is reflective of broader market conditions, suggesting that institutional investors are seeking stability amidst volatility.
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