Bitcoin Exchange Traded Funds (ETFs) They are seeing a new surge in demand.
Images shared by blockchain intelligence firm Arkham Intelligence show U.S. funds added roughly $250 million worth of bitcoin on Monday, the most in a single day in more than a month.
Following the jump, bitcoin's price touched $61,000 on its own coin on Tuesday for the first time since September.
Why the sudden surge in demand?
First, the basics: ETFs are simply funds that hold assets—in this case, Bitcoin– and allows investors to gain exposure through stocks traded on a traditional stock exchange.
When the new funds are received BitcoinIt's because of investor interest: people or entities that track the asset's underlying value are buying shares, and the fund's operators make the purchases on behalf of investors.
Top asset managers such as BlackRock, Fidelity and Greyscale launched the products in January. Getting approval From the US Securities and Exchange Commission (SEC).
And in the first few months, billions of dollars of investors hit the cash products, which were very popular. But demand has cooled in recent months, thanks in part to the Federal Reserve cutting interest rates — and by how much.
Markets are expecting the US central bank to cut rates tomorrow – but it's not yet clear how much borrowing costs will be cut.
Some analysts said a big 50-basis-point break could come from a small 25-basis-point break — which would make some investors whet their appetite, experts said. Decrypt.
“I think this is a direct response to the increased likelihood of a 50-basis point rate cut instead of a 25-basis point rate cut,” said James Butterfill, head of research at CoinShares.
“We saw yields really pick up on Friday last week,” he added, citing a 50bp cut and more dovish comments from various Fed members.
Investors piled up shares of the new Bitcoin ETF earlier this year, sending prices soaring, with the largest virtual coin hitting a new high of $73,737 in March. The asset has seen volatility since then, and is down about 18% from that peak.
However, the tide seems to be turning: CoinShares data released Monday shows that $436 million hit crypto investment funds last week, and most of that went into Bitcoin ETFs. That comes after a series of investors withdrew a record $1.2 billion from Bitcoin funds.
Will Tomorrow's Expected Announcement Bring Bitcoin Up Another Price Chart?
Edited by Andrew Hayward.
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