(Kitco News) – Bitcoin (BTC) bulls are looking to establish a solid base of support at $66,000 in early trading on Thursday after King Crypto experienced its best day in two months on Wednesday, spiking nearly 8.5% after the Consumer Price Index (CPI) reading for April came in line with expectations.
BTC/USD Chart by TradingView
“The strong performance is most likely linked to the growing consensus that much anticipated interest rate cuts are finally around the corner,” said Neil Roarty, analyst at investment platform Stocklytics.
“Both the Bank of England and the European Central Bank have hinted that those cuts may begin as soon as June,” he added. “The US will probably hold off until September, although with inflation down, the Fed is under increasing pressure to act.
Roarty said this is important for Bitcoin because “when savers can enjoy high returns from banks, the appeal of riskier assets like cryptocurrencies drops. But when those safer returns are reduced, investors tend to be more daring.
“With central bankers worldwide seemingly in agreement that it’s time to slash interest rates, Bitcoin suddenly looks like a more appealing investment - particularly for those willing to take on some risk in search of a higher return.”
Another tailwind for Bitcoin is the return of positive flows into the spot BTC exchange-traded funds (ETFs), which have seen three straight days of net inflows totaling $469.5 million. The only recorded outflow so far this week was a $50.9 million drawdown from Grayscale’s GBTC on Tuesday.
And the streak of big names revealing Bitcoin ETF allocations continues, with multinational investment bank and financial services company Morgan Stanley disclosing that it holds $270 million worth of Bitcoin ETFs as of March 31, according to a quarterly 13F filing with the Securities and Exchange Commission (SEC).
The finer details show that Morgan Stanley is now the third-largest holder of GBTC shares behind Susquehanna’s $1.1 billion and Horizon Kinetics’s $946 million, according to data provided by Fintel. The bank also holds $2.3 million worth of ARK Invest’s ARKB ETF, making it one of the top 20 ARKB holders.
Morgan Stanley joins hundreds of other institutional investors that have declared exposure to U.S. spot Bitcoin ETFs in their first-quarter 13F filings over the past few weeks, and many analysts say this is just the beginning.
“It seems like it was only yesterday that the prospect of states buying Bitcoin was seen as completely delusional, but times are changing – and fast,” said market analyst Bloodgood. “On Tuesday, the State of Wisconsin Investment Board disclosed a Q1 purchase of almost $100 million of BlackRock’s Bitcoin ETF, along with $64 million of Grayscale’s Bitcoin Trust. This isn’t a huge allocation in their $37.8 billion portfolio, but it still matters, as it makes Wisconsin the first U.S. state to invest in Bitcoin. With the ice now broken in a big way, which U.S. state or other country will be next?”
Julian Fahrer, co-founder and CEO of Apollo, showed in an X post that Morgan Stanley is the sixth-largest spot BTC ETF holder while Millennium Management is the top holder with $1.8 billion worth of exposure.
Top #Bitcoin ETF Holders of Q1 (updated again):
1. Millennium Management ($1.8b)
2. Susquehanna ($1.1b)
3. Horizon Kinetics ($989m)
4. Bracebridge ($404m)
5. Boothbay ($303m) pic.twitter.com/5GPnC6FlXe— Julian Fahrer (@Julian__Fahrer) May 16, 2024
At the time of writing, BTC trades at $65,790, an increase of 2.15% on the 24-hour chart.
