- Bitcoin’s 30-day average volume reaches its highest point since 2021- an increased institutional presence.
- Exchange flows for Bitcoin hit levels not seen since the previous bull cycle peak, reaching around $5.15 billion.
- Launch of 10 US spot Bitcoin ETFs sparks an explosion of interest, with daily volumes peaking at two-year highs.
Bitcoin is experiencing a surge in trading activity, with its 30-day average volume reaching its highest point since 2021. This boom is attributed to two key factors: a growing presence of institutional investors and the recent launch of US spot Bitcoin ETFs.
The exchange flows for Bitcoin have reached around $5.15 billion in mid-2021. Glassnode’s analysis reveals that throughout Bitcoin’s history, only 68 days have recorded higher figures, highlighting the magnitude of the current market momentum.
ETF Impact
The launch of 10 US spot Bitcoin ETFs is seen as a major driver of interest, attracting previously risk-averse investors.
It has triggered substantial trading activity, with market makers playing a crucial role in purchasing Bitcoin for ETF issuers like BlackRock and Fidelity.
Sam Holman, a derivatives analyst at Australian trading firm Zerocap, notes that,
“Combined with Grayscale redemptions, the futures basis trading at attractive levels again, and the general speculation surrounding the ETF, I am not surprised to see volumes trade at two-year highs.”
“it to normalize somewhat in the coming months.”
While the surge in volume benefits traders seeking quick market entry and exit, it is worth noting that Bitcoin’s liquidity, though recovering, remains below pre-November 2022 levels.
“Mature and well-established investment entities appreciate better liquidity, more stable returns, and lower volatility for diversification purposes,” said Le Shi, head of trading at market maker Auros.
On the other hand, active hedge funds thrive on increased volatility, aligning with their core business model.
As Bitcoin continues to assert its presence, the dynamics between institutional investors and market forces are expected to shape the cryptocurrency landscape in the months ahead.
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