Bitcoin is poised to achieve its fifth consecutive monthly gain, marking its longest winning streak since the pandemic-induced rally fueled by accommodative monetary policies.
In January, Bitcoin (BTC) experienced notable price swings, driven by the introduction of the first US spot Bitcoin exchange-traded funds (ETFs) and evolving views on monetary policy.
However, if the leading cryptocurrency maintains its upward trajectory, it will achieve its longest streak of monthly gains since the six months spanning October 2020 to March 2021 during which it reached a record high of almost $69,000.
Bitcoin Surged on Spot ETF Optimism
The launch of spot Bitcoin ETFs by prominent issuers such as BlackRock and Fidelity Investments on January 11 significantly impacted Bitcoin’s performance.
Last year, Bitcoin surged by nearly 160% in anticipation of these ETF launches, as investors speculated they would attract new participants to the market.
However, following the ETFs’ debut, Bitcoin experienced a 12-day drop of approximately 21% as traders closely monitored Bitcoin ETF performance.
One of the notable products, the $21 billion Grayscale Bitcoin Trust, transitioned from a closed-end structure into an ETF format.
Initially, investors withdrew funds from the Grayscale fund after the conversion.
The pace of these withdrawals has since slowed, enabling Bitcoin to recover some of its losses.
29 Jan BTC stats:
net +4k creations
6k GBTC outflows, 10k ETF inflows pic.twitter.com/d9VxXP8ibI
— 0xRamen (@0xRamenUmai) January 30, 2024
Decrease in GBTC Outflows Impact Bitcoin
The decrease in outflows from the Grayscale fund has positively impacted market sentiment, as noted by Sean Farrell, the head of digital asset strategy at Fundstrat Global Advisors LLC.
In a recent note, Farrell emphasized the significance of this development for the overall market.
Data compiled by Bloomberg reveals that the ten ETFs have collectively attracted a net inflow of $1 billion thus far.
These ETFs have had the most successful launch in history, both in terms of trading activity and investor flows, according to Bloomberg Intelligence.
In addition to ETF developments, investors are closely following this week’s Federal Reserve interest-rate decision, with probabilities evenly split regarding the possibility of a rate cut in March.
Any significant changes to this outlook could influence Bitcoin and the broader cryptocurrency market, given their sensitivity to shifts in sentiment and perceptions of liquidity.
Overall, if the leading cryptocurrency continues its upward movement, it will mark the fifth consecutive monthly gain.
Notably, BlackRock’s spot Bitcoin ETF surpassed $2 billion in assets under management (AUM) just two weeks after its launch on the Nasdaq.
The ETF, known as the iShares Bitcoin Trust (IBIT), has seen its market capitalization reach $2.11 billion due to Bitcoin’s recent price performance.
BlackRock now controls over 52,000 #Bitcoin in $IBIT.
Just over $2 Billion of #Bitcoin.
And yet, @YahooFinance has not figured out how to display it’s Holdings as #Bitcoin is such a new asset for Wall Street.
It just looks like a ghost fund with $2 Billion in it.
We’re less… pic.twitter.com/g2PNXqdxTC
— British HODL (@BritishHodl) January 29, 2024
Fidelity’s Wise Origin Bitcoin Fund (FBTC) is currently trailing behind with $1.8 billion in inflows over the past 10 days.
The annual fees charged by ETF issuers play a role in attracting capital.
BlackRock set its fee for the iShares ETF at 0.12% for the first 12 months or until the first $5 billion in assets under management, after which it plans to increase it to 0.25%.
Other issuers, such as ARK Invest, charge 0.21%, VanEck lists a fee of 0.25%, and Bitwise charges 0.20%.
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