Bitcoin (BTC-USD) has surpassed $50,000 for the first time since late 2021, continuing recent crypto rallies and posting gains of over 17% over the past month. With many inflows driven by the recent approval of spot Bitcoin ETF offerings, can Bitcoin sustain this upswing?
Sean Farrell, Head of Digital Asset Strategy at Fundstrat Global Advisors, and Dante Cook, Head of Swan Business at Swan Bitcoin, join Yahoo Finance to discuss Bitcoin ETF inflows and provide insight into the future of Bitcoin.
Cook puts the rally into context:
“There are a lot of other factors besides just ETF inflows, although that's a big reason why… you're seeing a lot of these price moves because these ETF launches were historic,” Cook puts the rally into context. “FBTC, Fidelity’s product [and] IBIT, Blackshare's product, are the number one and two most successful ETF launches of all time. Just as the Chiefs and Patrick Mahomes won back-to-back championships, you have seen back-to-back dollar inflows into this asset class at historic levels over the last two weeks.”
For more expert insights and the latest market activity, click here to watch this full episode of Yahoo Finance Live.
Editor's Note: This article was written by Nicholas Jacobino
Video transcript
– It has been a month since the SEC approved spot Bitcoin ETFs. According to CoinShares, the funds have attracted nearly $3 billion in inflows since their launch. Today, Bitcoin prices briefly exceeded $50,000, driven in part by inflows from spot Bitcoin ETFs. Joining us now are Dante Cook, Head of Swan Business at Swan Bitcoin, and Sean Farrell, Head of Digital Asset Strategy at Fundstrat Global Advisors, to get the latest on crypto. Guys, I welcome you both to the program.
And Sean, maybe I'll start with you. It's been about a month, Sean, since the SEC approved these new spot Bitcoin ETFs. What have we learned so far, Sean? Granted, it's still early days, but what have we learned so far about the demand for these new products?
The story goes on
SEAN FARRELL: Well, we've learned that it's important to factor BlackRock into the equation. We learned that there is a demand for these products. And we also learned that people generally prefer low-cost liquid products over other products that may be more expensive and don't replicate the underlying asset as effectively.
– Dante, is this actually the reason Bitcoin has risen so much, or are there other factors that people should be aware of?
DANTE COOK: Well, there are many other factors besides ETF inflows. Although this is a big reason why you see a lot of these price movements. Because these ETF launches were historic. Over 5,000 ETFs have been launched in the last 30 years. And FBTC, Fidelity's ibbett Black Shares product, are the number one and number two most successful ETF launches of all time.
And just like the Chiefs and Patrick Mahomes won back-to-back championships, you've seen historic inflows and dollar flows into this asset class over the last two weeks in a row. And when you couple that with things like the Bitcoin halving, where the overall supply of Bitcoin is halved around April, I mean you're seeing a massive influx of institutional and retail demand that's causing a supply shock.
So I think there are a lot of different factors.
– And Sean, I'm curious, Bitcoin went up to 50,000 for the first time in over two years. Sean, where do you think the price will go from here, at least in the short to medium term? What puts and takes do we need to consider?
SEAN FARRELL: Yes. See. So we start – our analysis is based – we always start with macros. And we saw some potential turbulence at the beginning of the year and thought we would go higher. Our price target for the year was $125. Certainly not in a straight line. However, much of this turmoil, in our view, would come from a reassessment of the timing and frequency of possible Fed rate cuts, as well as possible upward pressure at the long end of the curve due to a possible issuance of hike coupons by the Treasury.
And if we look at what has happened over the past few weeks from the launch of the ETF to today, we have withstood a fairly constant barrage of negative macroeconomic variables. We had a pretty massive rally in the dollar. We have priced out most of the excessive rate cuts that I just mentioned and alluded to. And we also had some movement – an upward movement at the long end of the curve.
So all in all it paints a pretty constructive picture as I'm at $50,000 after just going through this, which makes me reasonably confident that this rally certainly has room to continue in the near future.
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