April 25, 2024

Spot Bitcoin ETF Enthusiasm Spurs Increased Capital Inflow into Crypto Markets

After a challenging decade of attempts, the US Securities and Exchange Commission (SEC) finally approved spot Bitcoin ETFs. These products enable retail customers and traditional financial institutions to access Bitcoin’s price through standard brokerage apps without relying on crypto exchanges.

This excitement is being reflected in the prices of altcoins as data indicates a notable influx of capital into the crypto market.

Spot Bitcoin ETF Frenzy Boosts Capital Inflow

At the beginning of the year, the quantity of ERC20 stablecoins in US dollars on exchanges was approximately $18 billion. But as of this week, it has surged to $20 billion.

According to the latest CryptoQuant analysis, this influx of $2 billion indicated the flow of capital into the crypto market, impacting the current prices of altcoins.

The excitement surrounding spot Bitcoin ETFs is anticipated to contribute to the continued influx of capital into the overall ecosystem. Despite a declining trend since the close of 2022, this pattern has persisted into 2023.

Notably, there is a reversal in this trend as of 2024, indicating a potential increase in risk appetite. This shift may ultimately benefit the entire digital asset sector.

Spot Bitcoin ETF Sees $4B Trading Vol Debut

Besides the increased capital influx into the market, the 11 spot Bitcoin ETFs generated a trading volume exceeding $4 billion after their debut. Grayscale dominated the majority of this trading activity with $1.9 billion.

Following behind the DCG subsidiary were BlackRock and Fidelity Investments, with $942 million and $628 million in trading volume, respectively.

Coinbase’s Bitcoin over-the-counter (OTC) trading reached a record $7.7 billion on January 11th. This surge coincides with a notable uptick in overall crypto exchange trading volumes, hitting $52 billion, the highest since March 2023.

Meanwhile, a recent report by Standard Chartered Bank predicted that Bitcoin ETFs could potentially attract inflows between $50 billion and $100 billion by 2024. This anticipated influx is deemed to be a crucial catalyst for the potential surge in Bitcoin’s value, with projections reaching an impressive $200,000 by the conclusion of 2025.

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