ETFs
Altcoins rally with record ETF inflows
The altcoin market is on fire! Fueled by a rise in value and a decline Bitcoin dominance, altcoins are experiencing a red-hot rally. The total market capitalization of altcoins soared 15% in just two weeks, reaching a staggering $1.156 trillion.
But what is behind this explosion? Let’s dig.
Bitcoin ETFs Drive Market Growth
In a historic milestone for the cryptocurrency market, Bitcoin ETF in the United States have seen an inflow of more than $2 billion over the past two weeks. A record $1 billion was received last week, including $305 million on May 21 alone. Bitcoin ETFs, which track the price of Bitcoin and are traded on conventional exchanges like the NYSE, provide investors with exposure to Bitcoin without needing to hold the cryptocurrency directly.
Farside Data shows that U.S. spot Bitcoin ETFs saw net inflows of approximately $252 million on May 24, marking the 10th consecutive trading day of such inflows. Notably, BlackRock’s IBIT leads the pack with an inflow of $182 million, followed by Fidelity’s FBTC with $44 million, Bitwise’s BITB with $6.4 million, and the ARK Bitcoin ETF 21Shares with an inflow of $4 million.
Crypto Predictions: Reaching New Highs
Leading crypto influencer Lark Davis made some bold predictions. He predicts significant price increases for Bitcoin and Ethereum, with Bitcoin reaching $150,000 and Ethereum reaching $15,000.
Davis attributes this rise to the growing influence of Bitcoin ETFs, which are already attracting hundreds of millions of dollars in daily inflows. He expects a similar trend for Ethereum ETFs, which are expected to debut soon.
According to a Kaiko analyst report, Grayscale’s next Ether (ETH) spot ETF could be a game-changer, like the BTC ETFs. If it follows the path of the Grayscale Bitcoin Trust (GBTC) in transitioning to an ETF, it could see daily outflows of around $110 million. GBTC saw a significant outflow of 23%, amounting to $6.5 billion in the first month following the conversion on January 11.
Davis predicts that as the bull market peaks, various investors, including regular investors, institutions, wealth managers, pension funds and even countries, will invest billions in these ETFs daily, driving up prices . He claims that ETF-focused investments will drive up the prices of Bitcoin and Ethereum, as current market sentiment does not fully reflect their growth potential.
What do institutions look at?
The first quarter reports reveal an interesting trend: more than 20% of exposure to US spot Bitcoin ETFs came from large investors and institutions with assets exceeding $100 million. This includes major hedge funds, banks and even the Wisconsin state pension fund. This highlights the growing institutional interest in Bitcoin ETFs and suggests a similar trend for ETH ETFs.
Although ETH ETFs have yet to launch, speculation is that they could reverse BTC ETF inflows and make altcoin history. Accept?
Also discover: Mt. Gox transfers $840 million in Bitcoin before creditors are paid: will the price of BTC fall?
Don’t miss the boat! Dive deeper into the altcoin market and discover your next investment opportunity.