Bitcoin (BTC) is experiencing a 6.4% increase
this week, reaching $73,753, marking a new all-time high in the last three
days. Such rapid upward momentum can be intimidating, but not for everyone. The
ProShares Bitcoin Strategy ETF (BITO) saw capital inflows of $165.3 million,
its second-largest result since its inception.
Spot Bitcoin-ETFs also report net capital
inflows. The IShares Bitcoin Trust (IBIT) by BlackRock received $2 billion in
capital inflows last week, following $1.9 billion the previous week. The
second-largest Fidelity Wise Origin Bitcoin Fund (FBTC) saw $1.3 billion in
inflows in the first week of March, its largest in history. However, some ETFs
were less fortunate. The Grayscale Bitcoin Trust (GBTC) lost $1.8 billion
during the week, despite overall net capital inflows of $2.7 billion in the
crypto market, with over $2.6 billion invested in Bitcoin. As a result, Bitcoin
has become the world’s eighth-largest asset by market cap.
El Salvador has reported a 69.0% gain from its
crypto investments, having been the first country to introduce Bitcoin as legal
tender in 2021. This move may inspire other countries with weak national
currencies to follow suit. Furthermore, improving the crypto legal framework in
the United States could facilitate the adoption process.
However, Bloomberg has reduced the likelihood
of spot Ethereum ETF approval by the U.S. Securities and Exchange Commission
(SEC) in May. The agency's silence, with no typical pre-approval activities
seen during the spot BTC-ETF approval process in October-December 2023, has led
Bloomberg to estimate the odds of spot ETH-ETF approval in May at 30%, down
from 70% in January. Approval expectations were a major driver of the 73% rise
in BTC prices and 79% rise in Ethereum since the start of February. This rally
is now being challenged by the SEC's silence. Investors are wary of such
concerning signals, and any indication from the SEC that approval may be
delayed could reverse the rally downwards.
Bitcoin is currently trading above the
resistance at $68,000-70,000 per coin. From a technical standpoint, this
indicates extreme overbought tension. However, prices may continue to rise to
$78,000-80,000.