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In 2024, Bitcoin reached a new milestone in institutional recognition: U.S.-based spot Bitcoin ETFs attracted billions in investments, and Bitcoin's price surpassed the psychological barrier of $100,000 for the first time. These achievements underscore the cryptocurrency's significance and highlight its evolution into a fully-fledged asset class.
Why are the biggest players in the financial market choosing Bitcoin, and what risks and opportunities await investors in the future? In this overview, we will explore these questions.
U.S. spot Bitcoin ETFs have reached a historic milestone: their total net inflow exceeded 500,000 BTC in less than a year since their launch. This figure underscores the growing interest of institutional investors and the significant impact these products have on the cryptocurrency market.
Since their debut on January 11, 2024, 12 U.S. spot ETFs have absorbed more than 2.5% of the total circulating Bitcoin supply, which stands at 19.8 million BTC.
According to Vetle Lunde, Head of Research at K33, net inflows into these funds surpassed 500,925 BTC, with a single-day investment of $223.1 million recorded on Wednesday, $121.9 million of which went into Fidelity's FBTC fund.
Among U.S. spot ETFs, BlackRock's IBIT ETF leads the pack, managing over 520,000 BTC, surpassing iShares Gold Trust (IAU), which holds $50 billion in assets. Following closely is Fidelity's FBTC ETF, managing more than 247,000 BTC. Grayscale's GBTC fund, which previously held 619,000 BTC, now manages only 210,000 BTC due to significant outflows.
The total assets of U.S. spot ETFs now exceed 1.1 million BTC—comparable to the amount attributed to Bitcoin's creator, Satoshi Nakamoto. This demonstrates the scale of institutional participation and the influence of ETFs on the market previously characterized by high volatility and low institutional involvement.
On December 11, Bitcoin again surpassed the $100,000 mark after a correction, gaining nearly 4% in a single day. This rally was driven by positive macroeconomic signals from the U.S., including November inflation data aligning with analyst expectations, reinforcing hopes for easing Federal Reserve policy. Increased institutional investor confidence also played a crucial role.
Stablecoin capitalization reached $200 billion, boosting overall market liquidity. Simultaneously, Bitcoin's market dominance rose to 54%, the highest level since early 2021. Experts predict that favorable economic conditions could propel further growth, though they caution about potential volatility.
Analysts foresee Bitcoin's potential rise to $105,000. Breaking this level likely triggers the liquidation of over $2 billion in short positions, further strengthening the upward trend. According to CoinGlass data, the market is experiencing significant leveraged position accumulation, which could catalyze growth and subsequent volatility.
The Australian corporation AMP, which invested $27 million in Bitcoin through its pension fund, exemplifies the growing interest from institutional investors. AMP has become the first company in Australia to include Bitcoin in its portfolio of pension assets. Company representatives cite the cryptocurrency's significance as an asset class and its growth potential as key drivers for this decision.
"The growth of Bitcoin has made it too important an asset to ignore," said AMP's senior portfolio manager, Steve Flegg.
However, other Australian pension funds remain cautious, refraining from crypto investments due to its volatility.
Despite optimism, Bitcoin faces key resistance at the $104,000 mark. Historically, this level has been a point for profit-taking, creating pressure on the market. Failure to break this resistance could lead to a trend reversal and a correction to $60,000–$70,000. Analysts note that January often sees declines following active growth during the fall.
Bitcoin continues to attract institutional investor interest, strengthening its position as a long-term asset. Breaking the $104,000 level could pave the way for new highs, but the likelihood of a correction remains, particularly amid profit-taking.
In the coming months, macroeconomic factors and the actions of major players, including institutional investors, will shape Bitcoin's trajectory. Regardless, 2024 has already become a historic year for Bitcoin, cementing its importance in the modern financial system.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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