Bitcoin’s price has experienced a significant surge, reaching approximately $67,000 and resulting in a rise in Bitcoin ETF volumes to a 7-week high. These ETFs, which have not seen such levels since late March, are now being traded with a daily volume of around $6 billion.
There are several key factors behind this surge. One of the main contributors is the inclusion of Bitcoin in new institutional investment products. In the United States alone, about 1,000 firms have purchased Bitcoin exchange-traded funds (ETFs). Research firm Santiment has reported that daily spot Bitcoin volumes have exceeded $5 billion. This increase in institutional interest has led to a total volume of $5.65 billion among seven Bitcoin ETFs in just one day. This is the highest volume recorded since BTC/USD reached its all-time high of $73,800. Santiment has interpreted this surge as an indication that whales are no longer solely accumulating Bitcoin on-chain.
The positive impact of this surge extends beyond just Bitcoin. Hedge fund manager Thomas Kralow has stated that it is a positive indicator for the overall market. Inflows into spot ETFs have continued to increase throughout May.
Interestingly, institutions such as Grayscale Bitcoin Trust, which were previously experiencing significant outflows, have recently seen modest interest. According to data from UK investment firm Farside, Grayscale Bitcoin Trust (GBTC) received modest interest of $27 million and $4.6 million on May 16 and 17, respectively.
The adoption of Bitcoin ETFs by institutions is further evidenced by Form 13F filings, which show that 937 US firms have turned to Bitcoin ETFs in the first quarter. This number is significantly higher than the number of firms interested in gold ETFs during their first quarter post-launch.
The surge in Bitcoin’s price can also be attributed to genuine institutional and sovereign adoption, according to trading firm QCP Capital. They believe that Bitcoin has exited the halving period and has rebounded strongly after falling below $60,000.
It is important to note that the information provided in this article should not be considered as investment advice. Cryptocurrencies are highly volatile and carry a significant level of risk, and investors should conduct their own research.