Considering the spate of sizable inflows into spot bitcoin ETFs and the recent ebullience surrounding equities, some investors are vexed by recent lethargy displayed by the largest cryptocurrency. However, sluggishness is in the eye of the beholder. Bitcoin gained about 3.3% for the week ending June 26, but HODLers wanted more.
Even against the backdrop of purported disappointment with bitcoin not hitting an all-time high in recent days, the Coinshares Valkyrie Bitcoin Fund (BRRR ) gained more than 3% last week. That’s nothing to scoff at, and BRRR’s bullishness supports the notion that advisors and investors are increasingly embracing ETFs as avenues for bitcoin exposure.
“Looking at the ETF cumulative inflows chart (excluding GBTC outflows), it’s clear that demand from institutional players has been robust. Since the most recent pullback in late March, net ETF inflows have climbed from roughly 527,000 BTC to over 630,000 BTC, an increase of around 100,000 BTC in under 3 months,” reported Bitcoin Magazine.
Capital flowing into ETFs like BRRR means issuers of those funds must buy bitcoin to back newly issued shares. That buying activity should lead to higher prices, but that scenario hasn’t played out to bitcoin bulls’ satisfaction. However, that could soon change.
Bitcoin, BRRR Could Be Ready for More Upside
More pragmatic market participants are apt to believe recent gains by bitcoin and ETFs like BRRR are acceptable. However, for those wanting more, it pays to understand why “more” hasn’t materialized. The good news is that it’s not a situation that will last forever.
Corporate and institutional buying of bitcoin has been strong. However, data indicate some bitcoin holders that have long been engaged with the cryptocurrency have recently been taking profits. That, coupled with daily mining activity, is bringing new supply to market.
“Over the past three months, more than 240,000 BTC from these older bands has been distributed to the market, nearly a quarter-million BTC in net outflows,” noted Bitcoin Magazine.
Fortunately, data also confirm selling activity by long-term holders is waning. In fact, exchange flows were at multi-year lows last week. Add to that, technical analysis indicates bitcoin is flirting with a potentially epic move to the upside. Some believe that if the digital currency reaches $110,000, it will force liquidation of bearish futures positions and if it moves beyond $112,000, $140,000 is a credible destination. That represents significant upside from where bitcoin was trading as of late June 27.
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