Bitcoin Tops $65,000 on ETF-Led Demand Despite GBTC Outflows

(Bloomberg) — Few obstacles seem to be in the way of Bitcoin’s current rally. The largest cryptocurrency rose for the second straight day and marched closer to its all-time high, driven by expectations of exchange-traded funds’ robust demand at the week’s start.

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The most liquid token rose to as much as $65,010 – its first move above $65,000 since November 2021 — before trimming back to $64,917 as of 8:28 a.m. London.

At the heart of this frenzy for the largest crypto token lies seemingly insatiable demand from US-listed Bitcoin ETFs, which began trading on Jan. 11. Bitcoin has jumped about 186% in the last 12 months.

Net inflows of $7.35 billion have been invested since the debut of US Bitcoin ETFs from some of the biggest fund names, including BlackRock Inc. and Fidelity Investments. Even outsize outflows at one notable firm — nearly $9 billion at Grayscale Bitcoin Trust since the ETFs were listed — haven’t swayed traders.

“Given the low liquidity over the weekend, markets are moving north in anticipation that tonight’s ETF inflows will continue and prices will continue to rally,” said Hayden Hughes, co-founder of social-trading platform Alpha Impact.

Traders are betting on the price to soon cross the record of almost $69,000, reached during the Covid pandemic in November 2021, given the ETFs’ strong demand and concern of missing out ahead of Bitcoin halving, which is expected in April this year. After halving — when the reward for mining is cut in half — the supply growth of the coin could come down, adding to the demand squeeze.

Other tokens known as altcoins, including Cardano and Solana, also were up Monday 8% and 1% respectively.

Story continues

Memes Rise

Small-cap tokens, known as meme coins, also rose on the back of Bitcoin’s rally. Dogecoin was up nearly 20% and Shiba Inu 34% in the last 24 hours.

“This is a situation reminiscent of the 2021 bull run, with retail traders looking to make quick profits from rising prices in very volatile tokens,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.

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