Bitcoin jumps to $62,000 with pension funds betting on ETFs

Bitcoin's price rose to a high of $62,745 late Thursday, fueled by heavy flows into exchange-traded funds (ETFs).

On Thursday alone, the Bitcoin ETF recorded $194.6 million in inflows, the most in the past two trading weeks. BlackRock's iShares Bitcoin Trust (IBIT) led this growth with inflows of $157.6 million. Following closely behind was the Wisdomtree Bitcoin Fund (BTCW), which recorded $118.5 million.

A New England pension plan company invests in a Bitcoin ETF

Despite its entry into other ETFs, Greyscale's Bitcoin Trust (GBTC) saw the highest outlay of $182.9 million. This comparison highlights the volatile but ultimately buoyant market sentiment around Bitcoin.

The week started on a positive note with ETFs recording a collective outflow of $168.4 million on Monday. Another $148.6 million was withdrawn from ETFs on Tuesday. Because of these early losses, the net inflow from Monday to Thursday was still an inflow of $77.3 million.

Read more: How to trade Bitcoin ETF: A step-by-step approach

Institutional interest in Bitcoin is growing, especially among pension funds. Traditionally, these funds have followed strict risk management protocols, demonstrating caution in their investment strategies. However, this conservative approach seems to be changing.

For example, New England Retirement Planning Company invested $249,429 in GBTC, acquiring 4,685 shares. This was revealed in its recent Form 13F filing with the US Securities and Exchange Commission (SEC).

Similarly, in July, Michigan State Retirement System announced a $6.6 million investment using the ARK 21Shares ARKB spot Bitcoin ETF. Jersey City Mayor Steven Fulop announced in July that the city's pension fund plans to invest in Bitcoin ETFs. Mayor Fulop's decision reflects growing confidence in Bitcoin's enduring presence and the potential of the underlying technology.

In May, the State of Wisconsin Investment Board (SWIB) made headlines. They bought $99 million worth of BlackRock Bitcoin ETFs iShares Bitcoin Trust (IBIT). This decision is in line with the broader trend of traditional financial institutions incorporating cryptocurrency into their investment strategies.

Bitcoin's price action has reflected its usual volatility. It has recovered impressively from its Monday-Thursday high of around $49,000 – a nearly 28% increase. However, the price has since been adjusted to around $60,909.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Often seen as a hindrance, enthusiasts interpret Bitcoin's volatility as a sign of dynamic potential. Michael Saylor, founder of MicroStrategy, likens it to powerful natural events.

“Bitcoin is volatile, but volatility is a sign of great power. Rivers, waterfalls, and fire are all volatile; yet they hold energy that we can harness. This digital asset is attracting huge amounts of capital, which is driving its outperformance,” Salor said.