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Bitcoin (BTC) enthusiasts have reason to celebrate as the cryptocurrency ended the week at around $48,300, marking a notable 13.4% increase from the previous week's closing price of $42,600.
This surge in Bitcoin's price is largely attributed to the significant increase in inflows into BTC Spot ETFs, according to Matteo Greco, Research Analyst at Fineqia International, a publicly listed digital asset and fintech investment firm.
In the past weeks, the outflow from the Grayscale Bitcoin ETF (GBTC) saw a remarkable reduction, aligning with expectations post the initial trading period. Notably, the outflows from GBTC dropped from an average of $500 million per day during the first two weeks to approximately $83 million per day in the past week, representing an 85% reduction.
Greco emphasizes the visible correlation between the diminishing outflows from GBTC and the upward trajectory in Bitcoin prices, especially evident when examining the daily flows into BTC Spot ETFs. This reduction in outflows coincided with a consistent influx into BTC Spot ETFs, resulting in eleven consecutive days of net inflows starting from January 26th.
The significant reduction in GBTC outflows is further mirrored by the total net inflow into BTC Spot ETFs, which reached approximately $1.2 billion, the highest weekly inflow since their inception.
Additionally, there's a notable shift in the landscape of ETF assets under management (AUM). While Blackrock (IBIT) maintains its lead with $4.2 billion in AUM, other players like Fidelity ETF (FBTC) and Ark & 21Shares (ARKB) have emerged, with FBTC holding $3.5 billion and ARKB surpassing $1 billion in AUM.
Despite the surge in Bitcoin prices and ETF inflows, the market remains highly active, with trading volumes reaching approximately $5.5 billion for the week. This robust activity underscores the continued interest and participation in the cryptocurrency market.
The strong performance of Bitcoin and the influx of institutional investment through ETFs signal a growing confidence in the digital asset, paving the way for further adoption and integration into traditional financial systems.
