(Kitco News) – Bitcoin (BTC) bulls looked to reignite the crypto rally in early trading on Monday as the top crypto spiked to a high of $63,750 to start the shortened trading week in the U.S., which will celebrate the Fourth of July on Thursday.
After hitting a low of $59,881 on Friday, King Crypto climbed 6.5% over three days, with bulls now looking to secure support above $63,000 before making their next push higher.
BTC/USD Chart by TradingView
The recovery comes as flows into spot Bitcoin exchange-traded funds (ETFs) have begun to tick higher, with data provided by Farside Investors showing that the ETFs recorded inflows for four straight days, albeit at lower levels than previously seen.
Between Tuesday and Friday of last week, Bitcoin ETFs collectively saw an increase of $137.2 million in assets under management (AUM); however, that amount was lower than the $174.5 million in outflows recorded on Monday.
According to the latest digital asset fund flows report from CoinShares, “Digital asset investment products saw a third consecutive week of outflows totalling US$30m, with last week indicating a significant stemming of the outflows.”
“In contrast to prior weeks, most providers saw minor inflows, although this was offset by incumbent Grayscale seeing US$153m outflows,” said James Butterfill, Head of Research at CoinShares. “Trading volumes rose by 43% week-on-week to US$6.2bn but remain well below the US$14.2bn weekly average for the year so far.”
Breaking it down by geographic region, the U.S. saw total inflows of $43 million, while Brazil and Australia recorded inflows of $7.6 million and $3 million, respectively.
“Negative sentiment pervaded Germany, Hong Kong, Canada and Switzerland with outflows of US$29m, US$23m, US$14m and US$13m, respectively,” Butterfill said.
While the flows for Bitcoin began to stabilize, Ethereum (ETH) recorded $61 million in outflows, its highest outflows since August 2022. Ether has now recorded declines of $119 million over the past two weeks, making it the worst-performing asset year-to-date in terms of net flows.
“Conversely, multi-asset and Bitcoin ETPs led the inflows with US$18m and US$10m respectively,” Butterfill said. “Short-Bitcoin also saw a rise in outflows totalling US$4.2m last week, suggesting sentiment may be turning. A range of altcoins saw inflows, most notable were Solana (US$1.6m) and Litecoin (US$1.4m). Blockchain equities, despite the positive sentiment for crypto this year, have suffered outflows of US$545m this year, representing 19% of AuM.”
ETF flows are now the primary focal point for crypto investors to gauge the health and level of interest in the crypto market as most major catalysts, aside from the official launch of spot Ether ETFs – which may come as soon as Wednesday – are now in the rearview mirror.
“BTC Spot ETFs saw neutral flows last week, with a $37 million outflow,” said Matteo Greco, Research Analyst at Fineqia International. “The net outflow occurred entirely on Monday, amounting to about $175 million, followed by four days of slightly positive flows, breaking a streak of seven consecutive trading days with net outflows. The total inflow since inception is now $14.5 billion, with cumulative trading volume surpassing $300 billion, reaching approximately $311.8 billion.”
“The significant influence of BTC Spot ETFs on the digital assets market is evident from the distribution of trading volume throughout the week,” he said. “From January to June 2024, weekend trading volume accounted for only 16% of the total, the lowest ever recorded for this period (H1 of a year). This indicates increased activity from traditional finance investors, with trading volume concentrated during Monday to Friday and particularly strong during US market hours, decreasing after the US market closes.”
“Meanwhile, ETF issuers continue discussions with regulators to launch Ethereum Spot ETFs,” Greco noted. “Rumours suggested that ETH Spot ETFs might go live in the first week of July, but the recent SEC request to amend and resubmit the S-1 documents by 8th July is likely to push the potential approval after mid-July.”
“Gary Gensler has previously indicated that trading might not begin until September, but market participants expect a faster process, with trading starting in a few weeks,” he added.
And the launch of Bitcoin ETFs and the forthcoming launch of Ether ETFs has issuers chomping at the bit to get other crypto products approved, with multiple firms setting their sights on getting a Solana ETF listed on the U.S. market.
“In a sign of increasing traditional finance adoption of digital assets, VanEck, and 21Shares, two prominent issuers, have filed for Solana (SOL) Spot ETFs,” Greco said. “VanEck claims that SOL is a commodity, similar to BTC and ETH, which contrasts with the SEC's stance last year, categorising various digital assets, including SOL, as potential securities. Additionally, SOL's lack of a futures market in the US raises further questions regarding liquidity and market fairness, potentially slowing the approval process.”
“Despite these challenges, the approval and launch of BTC Spot ETFs, the anticipated launch of ETH Spot ETFs, and the recent SOL Spot ETF filings highlight the growing interest and adoption of digital assets by traditional finance service providers and investors,” he concluded. “This trend projects a positive outlook for the digital assets market in the mid to long term, with increased establishment in financial markets, accompanied by rising inflows, liquidity, and transparency.”
At the time of writing, Bitcoin trades at $63,057, an increase of 2.37% on the 24-hour chart.
