The Rise in Bitcoin Market Supported by Institutional Inflows
Recently, Coinbase research analysts projected a strong outlook for Bitcoin (BTC) in the market for the next three to six months, citing substantial support from institutional investors. The institutional research division of the popular digital asset exchange detailed the trajectory of Bitcoin and Ethereum, alongside other on-chain data, following the approval of ETFs.
With the green light given to spot Bitcoin ETFs by the United States Securities and Exchange Commission on Jan 10, market activities have been heavily influenced by ETF-related narratives. Notably, Bitcoin has witnessed remarkable inflows since the ETFs were launched, driving its price above $52,000. This price level had not been seen since December 2021, marking a resurgence in market activity.
Analysts’ Insights and Expectations for the Crypto Market
According to the report, the newly approved ETFs have attracted net inflows of $3.3 billion post-launch, causing Assets Under Management (AUM) to surge to $36.8 billion, with total crypto AUM reaching $58 billion. These figures have surpassed the initial estimates of institutional investors, which were around $1 billion. The consistent influx of funds has led analysts to believe that the market will receive significant support over the next few months.
As per the report, CoinShares documented weekly inflows of over $1 billion into Bitcoin institutional funds during the previous week, constituting 98% of the total inflow in the market. At the moment, Bitcoin is trading at $51,850, reflecting a 9.6% increase over the past seven days, and its market cap has exceeded $1 trillion.
Coinbase analysts anticipate a shift of focus towards Ethereum by more institutional investors in the coming months, following the positive response to Bitcoin ETFs. The recovery of open interest in CME Bitcoin and Ether futures over the last six days has led to speculations that Ether’s open interest may surpass that of BTC. The potential introduction of a spot Ethereum ETF could revolutionize the current standing of these assets, especially considering that Ethereum has been overshadowed by Bitcoin’s growth.
With the proven success of Bitcoin ETFs, Ethereum seems to be the next logical choice for institutions seeking to diversify their traditional investments into the cryptocurrency market.
