ETFs
Bitcoin Could Test Record Highs Next Week on ETF Flows, Analyst Says; Coinbase increases when upgrading
Cryptocurrency prices jumped on Friday as bitcoin retreated near $67,000. Institutional investors poured hundreds of millions of dollars into spot bitcoin ETFs last week. This could propel bitcoin to its all-time highs as soon as next week, one analyst said. Meanwhile, COIN stock surged after Coinbase received an upgrade and significant price target hike from BofA.
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Over the past week, more than 600 investment firms have revealed large holdings of spot Bitcoin ETFs, CoinTelegraph reported on Thursday. The list included major banks and hedge funds, such as Morgan Stanley (M.S.), JPMorgan Chase (JPM), Wells Fargo (WFC) And UBS (UBS). The group collectively owns $3.5 billion in Bitcoin ETFs. Hedge fund Millennium Management is the largest investor with $1.9 billion invested.
Millennium’s holdings include $844.2 million in the BlackRock iShares Bitcoin Trust (I BITE), $806.7 million in the Fidelity Wise Origin Bitcoin fund (FBTC), and $202 million from the Grayscale Bitcoin Trust (GBTC). The company also invested $45 million in the ARK 21Shares Bitcoin ETF (ARKB) and $44.7 million in the Bitwise Bitcoin ETF (BITB).
“Traditional institutions are here – and Bitcoin ETFs are a key part of the story,” wrote Nathan McCauley, co-founder and CEO of Anchorage Digital, in a note to IBD. Anchorage Digital is a cryptocurrency infrastructure provider that offers investment and custody services to institutions.
“Recent 13F filings demonstrate the type of institutional participation that Bitcoin ETFs promised to unlock. From hedge funds and endowments to governments and pension funds, traditional players are generating hundreds of millions of dollars in inflows. ETFs,” McCauley said.
According to McCauley, more institutions are expected to participate in crypto markets as Bitcoin liquidity increases.
Bitcoin ETF Entry Sequence
Meanwhile, Bitcoin spot ETFs have seen $726.8 million in inflows so far this week, with four straight days of inflows through Thursday, according to UK-based Farside Investors.
FBTC led inflows for the period with $245.1 million for the week, followed by ARKB with $233.7 million. Since launching on January 11, total spot Bitcoin ETF inflows stood at $12.409 billion as of Thursday. IBIT was the undisputed leader with $15.596 billion in inflows. However, Grayscale has seen $17.65 billion in outflows since converting to a spot ETF, bringing total inflows to $12.409 billion.
Alex Kuptsikevich, senior market analyst at FXPro, believes that increased capital flows and institutional demand could push Bitcoin to test its all-time highs near $74,000 next week. CoinDesk reported on Friday.
“If cryptocurrencies receive support from global risk appetite on Friday, the price of bitcoin could surpass $70,000 over the weekend,” Kuptsikevich wrote. “A test of the $71,000-$74,000 high zone, in our view, could occur as early as early next week, triggering a new bout of FOMO (fear of missing out).”
Coinbase increases when upgrading
BofA updated Friday Coinbase (PIECE OF MONEY) from neutral to underperforming, The Fly reported. The current macroeconomic environment has been positive for crypto market cap gains and trading volume growth, the company wrote. Meanwhile, Coinbase has demonstrated spending discipline and enjoyed higher operating leverage after significant cost reductions in 2022. BofA expects higher operating leverage important helps maintain profitability. Coinbase’s increased revenue mix should also mitigate earnings volatility, the company added. BofA raised its price target from 110 to 217 – a level Coinbase had surpassed in November.
COIN stock jumped 4.2% on Friday during the upgrade. Shares are trading below their 10-week moving average after falling steadily since a two-year high of 283.48 in late March. Still, Coinbase stock is up about 19.4% so far this year.
Cryptocurrency price action
Bitcoin traded around $66,900 on Friday after climbing as high as $67,458, a gain of almost 3% in the last 24 hours. On March 14, bitcoin reached a new all-time high of $73,798. The cryptocurrency is below its previous high of $68,990 set in November 2021. Bitcoin is up almost 11% this week and almost 59% in 2024.
Ethereum climbed 5.1% in the last 24 hours on Friday to trade near $3,100. Ethereum is now well off its 52-week high of $4,092 from March 12, and well below its November 2021 high above $4,800. On March 8, ETH crossed the $4,000 level for the first time in 26 months. The No. 2 crypto soared 35% in 2024.
In the meantime, MicroStrategy (MSTR), which holds around $13 billion in bitcoin, jumped another 10% on Friday. Shares of the software company rose more than 34.2% this week following Tuesday reports from Bloomberg that MSTR stock will join the MSCI World Index at the end of the month. MSCI made the decision based on market value after a review of its indexes. The change will take effect after the markets close on May 31.
MSTR stock is up nearly 151% year to date.
You can follow Harrison Miller for more stock news and updates on X/Twitter. @IBD_Harrison
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