Bitcoin experienced notable strength on Thursday, trading close to $72,500, as demand for spot exchange-traded funds (ETFs) persisted. According to CoinDesk market data, U.S.-listed spot ETFs attracted an impressive $155 million in net inflows on Wednesday. This influx is part of a broader trend of institutional buying, which has contributed to a rise in Bitcoin prices following a period of low trading activity.
Over the past two weeks, total allocations to these ETFs have surged to approximately $1.47 billion, reversing previous weeks of withdrawals. This resurgence indicates a stabilizing interest from institutional investors, who have collectively invested around $1.7 billion into U.S. spot Bitcoin ETFs since February 24, based on data from Bloomberg Intelligence that was previously reported by CoinDesk. This trend suggests that some investors are becoming more optimistic, believing the market has found a near-term support level.
Despite the positive inflow data, analysts from Bitfinex have pointed out that such investment may not immediately translate into significant buying pressure in the spot market. Authorized participants can create and short ETF shares before acquiring the underlying Bitcoin, which could delay the influence of these inflows on overall market prices.
Nonetheless, the continued inflows into spot ETFs, combined with Bitcoin’s resilience amid ongoing geopolitical tensions, point to its increasing importance in the macroeconomic landscape. Livio Weng, CEO of Bitfire, noted that Bitcoin is being revalued as a geopolitical hedge rather than merely a risky asset. He emphasized that unlike gold, Bitcoin can be traded around the clock and moved across borders instantly, making it an appealing option for capital preservation during times of geopolitical uncertainty.
On the flip side, caution is warranted based on on-chain data. Glassnode’s recent report highlights that underlying demand signals are fragile, with buy-side momentum diminishing considerably. The 30-day moving average of realized profit has plummeted by about 63% since early February. Additionally, the proportion of Bitcoin supply held at a profit has decreased to approximately 57%, a level historically linked to the early stages of deeper bear market conditions.
Moreover, Glassnode pointed out that the cost basis for short-term holders is hovering near $70,000, which could present a behavioral ceiling. This situation may transform price rallies into areas for distribution, as traders may choose to exit their positions once they reach breakeven.
