Key Takeaways
Bitcoin’s rise to $80,000 is attributed to strong institutional demand through spot Bitcoin ETFs, rather than retail FOMO.
Shortly after the US presidential elections, spot Bitcoin ETFs received approximately $2.3 billion in net inflows.
According to Cameron Winklevoss, co-founder of Gemini, Bitcoin reached $80,000 primarily due to consistent institutional demand through spot Bitcoin ETFs, rather than retail investor activity. He believes that this sustained demand from institutional investors indicates a long-term bullish sentiment and that the current market cycle is still in its early stages.
Winklevoss stated, “The road to $80k bitcoin was paved with steady ETF demand. Not retail FOMO. Little fanfare. People buy ETFs, they don’t sell them. This is sticky HODL-like capital. Floor keeps rising. We just won the coin toss, innings haven’t started.”
The performance of US crypto ETFs this week was heavily influenced by the outcome of the presidential elections. After Trump declared his victory on November 5, spot Bitcoin and Ethereum ETFs reversed their trend.
According to Farside Investors data, the group of eleven spot Bitcoin ETFs attracted approximately $622 million in net inflows on Wednesday. BlackRock’s IBIT achieved a record $4.1 billion in trading volume despite experiencing outflows that day.
IBIT subsequently recorded over $1 billion in net inflows on Thursday, increasing its assets under management to more than $33 billion. The ETF has now surpassed the size of BlackRock’s iShares Gold Trust (IAU).
Overall, US spot Bitcoin ETFs collectively accumulated about $2.3 billion in net inflows during the three trading days following Election Day. Other crypto products also benefited, with spot Ethereum ETFs drawing nearly $218 million from Wednesday to Friday, according to Farside Investors data.
Classic supply-demand dynamic
Bitcoin is experiencing a strong upward trend, thanks to a combination of factors. Institutions are acquiring Bitcoin through ETFs, while the halving event has reduced supply. Bitwise CIO Matt Hougan believes that these factors could drive Bitcoin’s price to six figures.
Hougan also expects global monetary adjustments, such as China’s stimulus measures and the Fed’s interest rate decision, to further boost Bitcoin’s prices.
On Thursday, the Fed and the Bank of England continued to implement easing monetary policies, with both central banks implementing 25-basis-point rate cuts. This followed the Fed’s more aggressive 50-basis-point reduction in September.