On Tuesday, spot Bitcoin exchange-traded funds (ETFs) recorded a notable net inflow of $216.33 million, marking the third consecutive day of positive fund flows. According to data from SoSoValue, BlackRock’s IBIT led the inflows with $121.03 million, followed by Fidelity’s FBTC, which garnered $90.95 million. Ark Invest and 21Shares’ ARKB also saw significant inflows of $43.3 million, while VanEck’s bitcoin fund attracted $3.27 million.
Conversely, Grayscale’s GBTC, the second-largest Bitcoin ETF, experienced outflows totaling $37.5 million, and Bitwise’s BITB noted net outflows of $4.72 million. In total, trading activity across the 11 spot Bitcoin funds reached $1.19 billion on Tuesday, indicating strong market participation.
Since their inception in January, these ETFs have accumulated a substantial net inflow of $15.27 billion. Bitcoin’s market performance has mirrored this influx of institutional investment, with its price rising by 1.58% over the past 24 hours to reach $58,154, following a brief dip to around $54,000 last Friday.
Investors Take Advantage of Market Dip
Analysts attribute recent selling pressures, including Mt. Gox repayments and Bitcoin liquidations by German government entities, to creating attractive buying opportunities for investors. CoinShares reported a significant $441 million influx into digital asset investment products for the week, despite trading volumes in exchange-traded products remaining modest at $7.9 billion, typical for the summer season.
Historically, July has been bullish for cryptocurrencies, with a median return of 9%, a trend traders expect to continue. SoSoValue data highlights a cumulative net inflow of $15 billion into Bitcoin, with daily inflows averaging $294 million. The total net assets across Bitcoin ETFs now stand at $49.32 billion, reflecting sustained institutional interest amid recent market fluctuations.
The positive market sentiment was bolstered by news of a German government entity reclaiming over $200 million worth of Bitcoin from exchanges such as Kraken, Coinbase, and Bitstamp. Meanwhile, on-chain trading volume has remained consistent with the year-to-date average, with BTC on-chain daily volume at around $41.1 billion and weekly volume at approximately $288 billion. High on-chain selling pressure can be attributed to the start of Mt. Gox repayments and ongoing selling by miners following the recent halving.
Launch of Australia’s Second Spot Bitcoin ETF
Blockchain-focused asset manager DigitalX has received regulatory approval to launch its spot Bitcoin ETF. This approval makes DigitalX the second company to offer a Bitcoin ETF on the Australian Securities Exchange (ASX), following VanEck’s recent approval. The DigitalX Bitcoin ETF, listed under the ticker BTXX, is set to debut on July 12 at 10 am local time.
Bitcoin Miners Face Critical Capitulation Phase
Despite these positive developments, Bitcoin miners are currently facing a critical phase known as “capitulation” as profits diminish amid the recent market sell-off. Capitulation occurs when miners scale back operations or sell off mined Bitcoin and reserves to sustain their activities, earn yield, or hedge against Bitcoin exposure.
A significant indicator of capitulation is the decline in Bitcoin’s hashrate, representing the total computational power securing the network. The hashrate has dropped by 7.7%, reaching a four-month low of 576 EH/s after hitting a record high on April 27. This decline mirrors conditions seen after the FTX collapse in December 2022, suggesting a potential market bottom.
Additionally, miners have been underpaid during this period, as evidenced by the miner profit/loss sustainability indicator. Daily revenues have plummeted by 63% since the halving, with total daily revenues dropping from $79 million on March 6 to $29 million currently. Revenue from transaction fees now accounts for only 3.2% of the total daily revenues, the lowest share since April 8.
Conclusion
The recent net inflows into Bitcoin spot ETFs and positive market activity underscore strong institutional interest and investor confidence in Bitcoin. Despite current challenges faced by Bitcoin miners, the overall market sentiment remains optimistic, with historical trends and robust trading activity supporting potential future growth. As the market evolves, strategic investments and new product launches like Australia’s DigitalX Bitcoin ETF are set to play crucial roles in shaping the cryptocurrency landscape.
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