ETFs
Bitcoin Hits 3-Week High As Inflation Data Cools, ETFs File First 13Fs
The price of Bitcoin has been rising since Wednesday, hovering around $66,000 – the highest since April 24 – according to CoinGecko data, in reaction to inflation better than expected data. The latest consumer price index, released Wednesday by the Labor Department’s Bureau of Labor Statistics, showed inflation rose a seasonally adjusted 0.3 percent.
This exceeded the forecasts of analysts, economists interviewed by Reuters forecasting a 0.4% CPI rise, consistent with February and March. The CPI rose 3.4% year-over-year after increasing 3.5% the previous month.
The CPI has been in the driver’s seat in recent months when it comes to Bitcoin prices, Teddy Fusaro, president of Bitwise Asset Management, told Fortune, adding that traders are watching the number more closely than any other economic indicator. This is because the market understands that a lower CPI increases the chances that the Federal Reserve will ease monetary policy. “Bitcoin investors view looser monetary policy as positive,” adds Fusaro, as it is understood that the original cryptocurrency is a volatile and high-risk asset.
The CPI remains “the most important factor in shaping cryptocurrency prices,” David Lawant, head of research at FalconX, told Fortune. The 90-day correlation between Bitcoin and the exchange-traded fund that tracks S&P500 The index reached 0.26, the highest since November 2023, he explains.
Another market force driving Bitcoin’s rise is the 13F filings for the 10 US spot Bitcoin ETFs that were released on Wednesday. A 13F is a quarterly report filed by investment managers with the Securities and Exchange Commission that discloses holdings in U.S. stocks.
The documents show that 937 professional companies had invested in the ETFs as of March 31. By comparison, that’s 10 times the number of investors in gold ETFs, according to Bitwise analysis. Professional investors held $11.06 billion in exposure at the end of the first quarter, or 18.7% of total assets under management, according to analysis by Research K33.
“As the market sees that real, large, established institutional investors have started investing in Bitcoin, the market is interpreting a virtuous cycle of increasing allocations from other institutions,” Fusaro explained. Here he describes some “skepticism” from market commentators that capital inflows of more than $53 billion were driven solely by individual interest. According to him, the first season of 13F reporting “disproved this theory”.
Finally, a single Bitcoin withdrawal of over $1 billion from the centralized crypto exchange also highlights the recent price action. Coinbase in the early hours of Wednesday. The recipient of the 16,021 tokens remains unknown, CryptoQuant reported. CryptoQuant analysts suggest it was an institutional player.
This story was originally featured on Fortune.com