The rise of Bitcoin towards its two-month peak of $69,000 has been driven by significant inflows into spot exchange-traded funds and a considerable increase in short liquidations.
As of the latest update, Bitcoin (BTC) is trading at around $67,739, reflecting a 0.6% increase over the past 24 hours. The asset’s market capitalization stands at approximately $1.33 trillion, supported by a daily trading volume nearing $30 billion.
Increase in short liquidations propelling price growth
Data from Coinglass reveals that short liquidations have been instrumental in driving Bitcoin’s recent price increase. In the last 24 hours, Bitcoin short liquidations totaled $17.91 million, outpacing long liquidations, which amounted to $11.8 million. This development underscores a common market trend where the forced close of short positions boosts demand, thereby elevating Bitcoin’s price and adding further buying pressure.
Alongside these market-driven liquidations, inflows into U.S.-based spot Bitcoin ETFs have reached notable highs. In the last week, these ETFs reported five days of consecutive net inflows totaling over $2.12 billion. This positive trend has continued into the current week, with fresh inflows of $294.29 million being recorded.
On Oct. 24, data from SoSoValue indicated that spot Bitcoin ETFs secured net inflows of $188.11 million, primarily driven by BlackRock’s IBIT ETF, which saw an inflow of $165.54 million. This marks a remarkable ninth consecutive day of inflows for BlackRock’s ETF, which has accumulated nearly $2 billion during this time frame.
In contrast, Bitwise’s BITB ETF secured $29.63 million in inflows, despite experiencing a previous day’s outflow of $25.2 million. Grayscale’s GBTC ETF, on the other hand, saw outflows of $7.05 million, continuing a trend that has resulted in over $20 billion exiting the fund since its launch.
Since the launch of the first spot Bitcoin ETFs in January, the 12 ETFs currently on the market have collectively garnered $21.53 billion in net inflows. Bloomberg ETF analyst Eric Balchunas has characterized this achievement as “the most difficult metric” to accomplish in the ETF space.
Balchunas pointed out how exceptional this milestone is, noting that gold ETFs took five years to reach a similar figure, thereby emphasizing the rapidly increasing appetite for Bitcoin investment among institutional players.
Political factors and potential regulatory changes
Beyond the present market dynamics, the political environment in the United States is also impacting investor sentiments.
Rumors of a potential victory for Donald Trump in the forthcoming presidential election have cultivated optimism among Bitcoin investors, who believe that a pro-crypto administration could foster blockchain innovation and ease regulatory burdens.
Trump’s policy proposals, which advocate for a regulatory framework favorable to blockchain technology and possibly involve replacing SEC Chair Gary Gensler, resonate with many institutional investors seeking a reduction in regulatory scrutiny.
This potential shift in the political landscape has offered an additional lift to Bitcoin’s price trajectory, suggesting a forthcoming regulatory atmosphere that could encourage cryptocurrency growth.
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