The sell-the-news reaction to the launch of the first spot Bitcoin (BTC) exchange-traded funds in the U.S. has morphed into a serious case of FOMO for investors as inflows into the various products continue to rise, putting a firm level of support under the price of the top cryptocurrency.
According to James Butterfill, head of research at CoinShares, the net inflows into the ETFs have reached a total of $4 billion as of Tuesday, the day that saw the largest net inflows to date.
US spot Bitcoin ETFs have just hit net inflows of US$4bn. Yesterday was the largest net inflows of US$651m since the launch day on 11th January. pic.twitter.com/uYk5Su7z7M
— James Butterfill (@jbutterfill) February 14, 2024
Many analysts have referenced the performance of the first gold ETF as a proxy for the level of uptake for Bitcoin, and thus far, digital gold has significantly outperformed its physical counterpart, achieving in a little over one month what it took two years for SPDR Gold Shares (GLD) to accomplish.
The NET cumulative flows for the 10 bitcoin ETFs (incl GBTC) has doubled in past 3 days to over $3b (for context it took $GLD nearly 2yrs to get to this point) after another half a billion yesterday. The Nine alone are nearing $10b in flows. Chart via @BitMEXResearch pic.twitter.com/jTht9wDqVf
— Eric Balchunas (@EricBalchunas) February 13, 2024
While GLD surpassed $1 billion in assets within three days of trading, volumes underwent a significant decline after that, with data provided by Bloomberg showing that the total known ETF holdings of gold remained below 10 million ounces for more than a year.
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But the metric that really has crypto traders excited was the effect that GLD had on the price of gold as the yellow metal underwent a multi-year bull market following the ETF launch, increasing from $400 on Nov. 18, 2004, to $1,800 by August 2011, a gain of more than 380% over 7 years.
On the day that the spot BTC ETFs launched, Bitcoin traded near $46,000, meaning an equivalent increase would give BTC a price target of $220,800, though the time frame for that to occur is up for debate.
According to technical analyst Gert van Lagen, once Bitcoin breaks above the 1.618 Fibonacci level at $62,300, it could surpass a price of $200,000 within one to three months.
History:
when $BTC broke the 1.618 bear market extension, it always topped at the 2.272 extension within 1-3 months.
Extrapolation:
when $BTC breaks the 1.618 at $62.3k, within 1-3 months price already tops at ~$200k (2.272).
Legenda:
? Struggle to overcome the 0.618-0.786… pic.twitter.com/oMoWXtv6A9— Gert van Lagen (@GertvanLagen) February 14, 2024
On top of the momentum generated by the spot BTC ETF launches, Bitcoin’s price is also enjoying a pre-halving pump as the top crypto prepares for its next standardized reduction in new token emissions, predicted to take place in late April.
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In a separate post, van Lagen noted that Bitcoin “has broken the 78.6% Fibonacci level for the first time ever before a halving,” and suggested that it could potentially see a “pre-halving move to the $200,000 zone.”
$BTC [1M] has broken the 78.6% Fibonacci level for the first time ever pre-halving.
A pre-halving parabolic move to the $200k zone seems inevitable at this point. pic.twitter.com/i4jjlG0sHb— Gert van Lagen (@GertvanLagen) February 14, 2024
As of now, Bitcoin ETFs currently hold more than $30 billion in assets, making BTC the second largest ETF commodity in the country behind gold, which boasts $90 billion in assets, including $54 billion within GLD.
But the situation is rapidly evolving, and investors shouldn’t be surprised if Bitcoin is able to close the gap with gold in relatively short order. As noted by Balchunas on Wednesday, BlackRock’s IBIT “took in nearly half a billion all by itself [on Tuesday], showing an unusually strong second wind for a new launch, [and] is now over $5b, which puts it in Top 7% of all ETFs by size in just 23 trading days.”
