(Kitco News) – Bitcoin (BTC) finds itself struggling to hold support at $61,000 in early trading on Thursday as the absence of any major catalyst has traders unenthused, while the threat of higher-for-longer interest rates has lowered demand for risk assets.
Data provided by TradingView shows that a late effort by bears on Wednesday broke through support at $62,000, with Bitcoin hitting a low of $60,605 in the early morning hours of Thursday before bulls managed to halt the slide and push it back above $62,000.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $62,220, an increase of 0.28% on the 24-hour chart.
With the absence of any major catalyst on the horizon and the halving in the rearview mirror, exchange-traded fund (ETF) flows are the primary focus for investors, and the data leaves much to be desired.
According to Farside, flows into the U.S.-listed ETFs were nearly flat on Wednesday, with ten of the eleven products recording zero net flows while the Bitwise Bitcoin ETF (BITB) recorded $11.5 million in inflows.
On the whole, the week has been positive from a net flow standpoint as Monday saw inflows of $217 million while a net outflow of $15.7 million was recorded on Tuesday. That brings the running weekly total to $212.8 million in inflows, indicating that flows are starting to stabilize.
At the global level, a report provided by Fineqia International shows that cryptocurrency-related exchange-traded products (ETPs) have seen “a 64% growth in total Assets Under Management (AUM) in the year-to-date (YTD) amid continued interest by investors.”
But it hasn’t been up only, as “On a monthly basis, the total AUM dropped to $81 billion from $94.4 billion at the end of March, marking a 14.2% decrease,” the report said.
“The total market value of digital assets decreased by 18.8%, to about $2.29 trillion from $2.82 trillion in April,” analysts at Finequia said. “Even amid the market decline, financial products backed by digital assets maintained a 24.5% premium over the digital assets market, consistent with the trend seen in Q1. Year-to-date, ETPs holding digital assets rose 64% in AUM, while the digital assets market cap increased by 29.2%. This highlights a premium growth for ETPs of approximately 117% in comparison to the relative underlying.”
They noted that the increase in premium is largely attributed to the launch of spot BTC ETFs in the U.S., which “stimulated capital inflows into financial products featuring digital assets as underlying assets throughout Q1.”
“It’s fully baked now,” said Bundeep Singh Rangar, CEO of Fineqia. “With the initial rise from the SEC’s yeast effect having cooled off, the loaves are ready and being served on the ETF and ETN shelves across the world.”
Last week saw the launch of three Bitcoin and three Ether (ETH) ETFs in Hong Kong, and “the U.K. is poised to follow suit soon,” the report said. “Countries like Singapore, Japan, South Korea, and Thailand are actively constructing more conducive regulatory environments. These efforts align with those of a handful of other countries such as Australia, Brazil, Canada, Germany, Liechtenstein, and Switzerland that had previously permitted such products.”
“During April, the price of BTC declined by 13.6% to $60,150 from $69,650 at the end of March,” the analysts noted. “Simultaneously, the AUM of ETPs with BTC as their underlying asset experienced a 13.2% decrease, dropping to $63.2 billion from the $72.8 billion recorded at the end of March.”
“These figures emphasize a neutral flow throughout April, with the reduction in AUM perfectly reflecting the decline in the underlying asset's price,” they said. “Year-to-date, ETPs holding BTC have shown a 77.7% increase, while the BTC price has risen by 42.2%. This highlights an 84% growth in premium for financial products with BTC as the underlying asset in 2024.”
It was a similar story for Ether, which declined 14.9% in value in April, coinciding with “the AUM of ETH-denominated ETPs [decreasing] by 16.4%, falling to $12 billion from the $14.3 billion recorded at the end of March,” the report added. “Year-to-date, ETPs holding ETH have shown a 26.6% increase, while the ETH price has grown by 31.1%.”
“This emphasizes how the growing expectation among market participants of the SEC rejecting the approval of ETH Spot ETFs in May has led to a decrease in institutional exposure to ETH in favor of BTC,” the analysts said.
ETPs representing a diversified basket of cryptocurrencies, along with those representing an index of alternative coins, also saw significant declines in April, highlighting the breadth of the pullback following the bull market rally that started in January 2023.
While ETF flows are underwhelming and suggest sideways price action for the time being, crypto investor Elija provided a reason to be optimistic from an on-chain perspective, noting that the Bitcoin network fundamental “indicates a 300% gain from the current level,” meaning the Bitcoin top for this cycle “could be somewhere between $250,000 and $275,000.”
Is #Bitcoin Severely Undervalued?
Bitcoin's current network fundamentals indicate a 300% gain from the current level.
This means that the BTC top could be somewhere between $250,000 and $275,000.
The cycle is not over yet. pic.twitter.com/j2tW6v68sH— Elja (@Eljaboom) May 8, 2024
