Bitcoin has shaken off the gloom of the past two weeks, and the price has returned to US$70,000, gradually pushing towards the previous high of US$74,000. The main reason is that after the large outflow of GBTC funds, most of these funds returned to buy other Bitcoin ETFs, pushing up the decline again. Bitcoin prices, so ETF funds returned to net inflows last week, reaching US$850 million, which gave investors a big sigh of relief. It was originally thought that Wall Street investors had lost confidence in Bitcoin ETFs or the novelty had faded, but After excluding the unexploded bomb of GBTC, the Bitcoin ETF still has good buying orders.
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In addition to the stabilization of Bitcoin ETF buying, US$15 billion of options also expired last week. Since the ratio of short positions to long positions is 0.85, which means that there are many more long parties than short parties, the market has a strong bullish sentiment. Choose After the option expires, the option position will be re-established, which will provide market traders with more information for the next quarter.
In the past, options settlement in the cryptocurrency market basically did not affect the market, but this time due to the huge amount, it may amplify market fluctuations, but we believe that the impact is still small, because the bullish sentiment in the market is quite strong and the options are stable. Coin delivery does not involve spot trading of cryptocurrency. When options are consistent with the market trend, there is less chance of turning. Other factors will have a greater impact, such as interest rate policy shifts or Bitcoin ETF funds turning into net outflows. .
Compared with the options and contract fluctuations within the cryptocurrency market, the Bitcoin spot ETF is the main force that affects the price of Bitcoin the most. As long as GBTC starts to be redeemed in large numbers, the cryptocurrency market will be dragged down. The follow-up depends on the availability of funds. Returning to other ETFs, the return of funds will raise the price of cryptocurrency again. After research, Bitcoin is still in the early stages of ETF development. It is too early for ETF funds that we were worried about to turn into net outflows. Wall Street institutions’ short- and medium-term plan allocations are more Multi-fund into digital commodity ETFs such as Bitcoin ETFs.
For example, BlackRock CEO Larry Fink said in a recent Fox TV interview that their performance of IBIT exceeded expectations. Based on its excellent performance, he personally believes that Bitcoin spot ETF will be more popular and Gaining more customer adoption, in other words, BlackRock will promote IBIT through more consignment platforms and drive more customers to buy Bitcoin spot. We expect that the price of Bitcoin will continue to rise.
There is no shortage of sales themes for cryptocurrencies in the second quarter of this year. In April this year, there was a Bitcoin halving, and in May there were two major events, the results of the Ethereum spot ETF review were released. Fund companies will use these two themes to expand sales cooperation. We expect that it will help the Bitcoin spot ETF and drive spot buying momentum, and the market's performance in the third quarter is expected to be quite good.
There is no shortage of themes for cryptocurrencies in the second quarter, which will boost the rising sentiment of mainstream cryptocurrencies.
The Bitcoin halving in April is the most watched topic in the crypto market. Everyone believes that the Bitcoin halving will further reduce its supply, and its increased rarity will help push up its price, unlike gold, which discovers new veins every year. , Bitcoin is more scarce than gold in terms of quantity increase. Maybe the number of Bitcoins lost by users forgetting their private keys is even greater than the increase, but we do not think that the buying will really come from the reduction in new supply. Half of the impact, the real price thrust still comes from the Bitcoin ETF.
Fund companies are still expanding their Bitcoin ETF agency sales platforms. Not only mainstream securities firms, but also online brokerages are introducing Bitcoin ETFs for customers to purchase. Even financial management customers of banks are potential customers. They have not had access to Bitcoin in the past. , it is possible to purchase amazing Bitcoin ETFs under the promotion of banks. Through the sales network of securities dealers and banks, Bitcoin ETFs are expected to gain more customer favor, in other words, larger buying orders.
Next in May, the results of the Ethereum spot ETF review were released. The SEC has recently been actively collecting securities related to Ethereum as "securities". The market is worried that its POS system will cause the SEC to block the listing. After all, the Bitcoin ETF has also been in the market for several years. The hard work coupled with the court's ruling that the SEC must re-examine the application was a successful listing.
There has been no recent news of active communication between fund companies and regulatory authorities regarding Ethereum spot ETFs. Therefore, we believe that this is a higher-risk event, but fund companies will definitely be more active in promoting it after they have the experience of successfully listing Bitcoin ETFs. Ethereum spot ETF, as May approaches, the crypto may also actively speculate on the price of Ethereum.
As the buying of Bitcoin continues to grow, GBTC fund outflows are temporarily pulled back, and then most Bitcoins are bought by ETFs. There are two reasons. The first is that most of the funds flowing out of GBTC will flow back to buy other Bitcoin ETFs. , when funds return, the price of Bitcoin usually falls first and then rises; secondly, the growth of the Bitcoin ETF itself will also bring greater buying, driving the price to continue to rise.
The current market price has put all investors in a state of profit, and it can be observed from time to time that large investors transfer BTC to exchanges to sell. Early investors are selling their goods to ETFs, which also makes the current market liquidity quite strong, even if Even GBTC’s hundreds of millions of dollars’ worth of sell-offs can be absorbed. In the past several sell-offs of GBTC, there will only be a short-term pullback. If we closely observe the outflow and inflow of non-GBTC funds, as long as the scale of Bitcoin ETFs continues to grow, the price of Bitcoin will continue to grow. No big doubts.
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