s Bitcoin's price shot up over 20% in the past week to approach $64,000, demand for the cryptocurrency also exploded higher. However, data from analytics firm Glassnode revealed that major over-the-counter (OTC) trading platforms in the United States were down to just their last 40 Bitcoin in reserves. This extreme depletion of supplies directly indicates the immense demand straining major exchanges.
Institutions fuel the Rally
The catalyst was the launch of Bitcoin exchange-traded funds (ETFs) by prominent financial companies in January, fueling mainstream adoption and institutional interest. Approximately $70 billion has since flowed into spot Bitcoin ETFs, greatly enhancing liquidity and accessibility for big market players. As massive firms like BlackRock and Fidelity got involved through these investment vehicles, their billions of assets under management helped drive renewed bullish enthusiasm. Transaction volumes surged, with one order even including a 55,000/50,000 put spread, showing the influx of large market-moving trades.
Upcoming Catalysts Point to Further Gains
Looking ahead, three major factors are anticipated to additionally boost Bitcoin prices outside of any monetary policy implications. Firstly, the next halving event in April 2024 will see mining rewards cut in half, tightening the already dwindling supplies. Secondly, the expected 13F filings from Bitcoin ETFs next April and May will reveal further participation from large institutions. And thirdly, the launch of a new Hong Kong Bitcoin ETF in April is poised to attract fresh Asian capital. With mining costs estimated at $27,000 currently providing solid price support and anticipated to rise to $50,000 post-halving, analysts foresee conditions ripe for Bitcoin to surge past $100,000 in the coming months.
Strength Versus Gold ETFs Suggests More Upside
As the world's number one cryptocurrency closes in on $70,000, data shows money rotating out of gold ETFs as their inflows reverse and futures open interest declines. This indicates a growing preference for cryptocurrency as a store of value compared to gold. With some $70 billion now invested into Bitcoin through ETF vehicles since the new year, the resulting strengthening infrastructure has analysts even more bullish on its long term prospects.
