- What's Happening in the ETF Sector?
- Details on the Matter
- Impact on Bitcoin Price
In the second quarter of 2024, Bitcoin ETF funds saw significant growth despite the recent correction in Bitcoin's price.
What's Happening in the ETF Sector?
According to K33 Research senior analyst Vetle Lunde, the number of firms investing in the Bitcoin-based ETF fund increased by more than 27% in Q2 2024. In a social media post on August 16, he noted that as of June 30, 1,199 professional firms had invested in these funds, up by 262 from the previous quarter.
Details on the Matter
In Q1 2024, institutional investors held only 18.7% of the total ETF assets under management (AUM). Despite an increased allocation of institutional portfolios to US Bitcoin ETF funds, Bitcoin prices continue to struggle to surpass the $60,000 psychological level. On August 14, Bitcoin fell below this mark, trading at $58,370.
Impact on Bitcoin Price
ETF inflows, which contribute to price declines, remain steady. According to Farside Investors data, ETF inflows turned positive on August 15 with over $11 million in inflows. However, this is much less than the cumulative outflows of $81.4 million recorded on August 14. ETF inflows can significantly contribute to the price increase of a cryptocurrency. When ETFs surpassed the $50,000 mark on February 15, new investments in the cryptocurrency accounted for about 75% of the total.
The continued increase in institutional investments in Bitcoin ETFs could significantly impact cryptocurrency prices. Institutional participation is necessary for reaching new all-time highs.
