Bitcoin Remains Steady Over $70K: Crypto Traders Dismiss Waning ETF Inflows

Grayscale’s GBTC product saw significant outflows last week,  though inflows into other ETFs did not increase at the same rate, temporarily raising fears of a spot-driven selloff.

TakeAway Points:

  • Bitcoin’s quick spike above $71,000 on Tuesday was caused by optimism over potential new institutional product offerings based on the cryptocurrency.
  • BTC had significant upward momentum in May after the London Stock Exchange authorised a market for trading ETH exchange-traded notes (ETNs) and BTC, according to dealers.
  • With an average 10% increase, Coinbase Ventures-affiliated projects had the largest gains, while CoinDesk 20, an indicator of the largest tokens, increased by 4.47%.

Bitcoin Topped the $71000 Mark

Bitcoin (BTC) briefly topped the $71,000 mark early Tuesday before retreating as market sentiment grew on new bitcoin-based institutional product offerings and demand from traditional desks, according to a Coindesk report.

Crypto markets started rising on Monday as the London Stock Exchange approved a marketplace for trading bitcoin and ether (ETH) exchange-traded notes (ETNs) in May, as reported. The LSE will start accepting applications on April 8. 

The report stated that Singapore-based QCP Capital said in a Telegram broadcast there was “strong upside momentum” for bitcoin after the development, with asset managers also continuing to add BTC allocations as a “portfolio diversifier.”

“Anecdotally, wealth desks at major banks have been pleasantly shocked at the tremendous demand from clients for bitcoin spot ETFs and requests for structured products,” the firm added.

According to data, Bitcoin rose by almost 5% in the last day, spearheading the surge in major cryptocurrencies. Over 4.5% was gained by Ether, Solana’s SOL, and Cardano’s ADA. Among alternative tokens, Near Protocol’s NEAR and Internet Computer’s ICP saw the biggest increases, rising by more than 10%.

With an average 10% increase, projects associated with Coinbase Ventures—the investment division of the well-known cryptocurrency exchange—saw the largest overall rise. These increases coincided with a rise in mood and on-chain activity over the weekend on the closely linked Base blockchain.

With stablecoins subtracted, the larger CoinDesk 20 index saw a 4.47% increase. According to data, open interest in futures that follow cryptocurrency increased by about 8%, indicating money entering the market, which typically happens before instability.

Raised Concerns

The rise helped erase losses from last week amid record outflows from the Grayscale bitcoin ETF (GBTC). Inflows to other bitcoin ETFs declined in tandem, raising concerns of a spot-driven selloff. Some market analysts said the waning inflows were not a sign of concern, though, as long-term investors could have partially profited from their positions. 

We also do not see the state of inflows into spot Bitcoin ETFs as any cause for concern” Bitfinex analysts said in an email. “Even though negative ETF outflows featured heavily last week, all of it is from the Grayscale Bitcoin Trust (GBTC), as investors both switch out of the higher fees demanded by GBTC and also take profit, especially as many of these investors are long-term holders who entered during the bear market.” 

“GBTC investors are not the only sellers in the market. Whale wallet activities have also indicated significant profit taking,” they added.

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