Bitcoin could see another parabolic run following rising institutional interest

• Bitcoin is painting a bullish picture as more firms look to acquire it as a reserve asset.
• Bitcoin ETFs recorded $1.48 billion in inflows following Goldman Sachs announcement of its Bitcoin ETF holdings.
• The OCC confirmed the CFTC Bitcoin ETF options approval as analysts speculate they could launch within 24 hours.

Bitcoin (BTC) began the week positively, rising over 3% above the $91K threshold on Monday. Despite the recent rise, BTC could begin another extended bullish move as top firms are increasing their Bitcoin holdings and potentially adopting it as a reserve asset. Speculations around the launch of Bitcoin ETF options could also spur more attention and demand for the top digital asset.

Why Bitcoin could stage another bullish run

Corporate firms are increasing their BTC holdings

Bitcoin will likely begin another bullish run as several institutions have stepped up their buying pressure in the past week. 

• MicroStrategy announced it purchased 51,708 BTC for $4.6 billion.
• Semler Scientific purchased 215 Bitcoin for $17.7 million. The company initially added Bitcoin as a treasury asset in May and has since purchased $88.7 million worth of BTC.
• Mara Holdings (formerly Marathon Digital) and Metaplanet shared plans to acquire additional BTC from sales of convertible note offerings and bonds.
• Cosmos Health, a global healthcare group, announced that it has integrated Bitcoin and Ethereum as reserve assets. 
• AI firm Genius Group also announced that it has launched a Bitcoin treasury with the purchase of 110 BTC worth $10 million. The firm's purchase came at an average price of $90,932 per BTC.

The rush among firms to integrate Bitcoin as a reserve asset reflects growing confidence in the number one digital asset, particularly after Donald Trump's victory in the presidential elections. 

Increased Bitcoin ETF inflows post-election

Bitcoin ETFs recorded inflows of $1.5 billion last week, still largely influenced by the results of the US presidential elections earlier in the month.  The high inflows follows US Bitcoin ETFs' 20,560 BTC purchase last week, suggesting high demand for the leading cryptocurrency among institutional investors. 

Notably, Goldman Sachs revealed last week that it holds $710 million worth of Bitcoin through ETFs.

Likewise, Bloomberg senior ETF analyst Eric Balchunas stated that Nasdaq is ready to list options for BlackRock's IBIT "as soon as tomorrow," following the Office of the Controller of the Currency’s (OCC) confirmation of the Commodities & Futures Trading Commission (CFTC) approval of the products.

This could give room for wider adoption as exchanges begin trading options on the crypto products.

Tether mints 1 billion USDT tokens

Stablecoin issuer Tether minted 1 billion USDT tokens on the Ethereum network on Monday, stirring optimism in the crypto market. This is because an increase in stablecoin reserves reflects rising market momentum.

Tether transferred half of the newly minted USDT tokens to crypto exchange Binance, indicating that more traders and investors are seeking to invest in crypto. 

As previously "anti-Bitcoin" investors and companies have begun to declare new Bitcoin holdings, the market may likely see increased bullish sentiment toward BTC.

What does this mean for Bitcoin?

Institutional investors' increasing adoption of Bitcoin signifies a major shift in the market's perception of the top digital currency from a controversial asset to a legitimate investment. As regulatory clarity improves, institutions are more willing to integrate Bitcoin into their portfolios, indicating its growing acceptance as an alternative to assets like gold.

Additionally, the impact of the 2024 elections has left speculators wondering just how high Bitcoin can go, with more firms trying to secure a good spot in the bull cycle.

Crypto ETF FAQs

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.

Is Bitcoin futures ETF approved?

Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.

Is Bitcoin spot ETF approved?

Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.

Which are the pros and cons of crypto ETFs?

The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.

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