As a seasoned crypto investor with a decade of experience under my belt, I must say that the recent surge in Bitcoin ETF inflows, particularly BlackRock’s IBIT, has caught my attention. The $3.3 billion trading volumes recorded on Tuesday are unprecedented, especially considering that ETF activity usually peaks during market downturns. This sudden spike seems to be a clear case of FOMO driven by the Bitcoin price rally.
At present, the U.S. market for spot Bitcoin ETFs appears to be surging without pause, fueled in part by the BlackRock Bitcoin ETF (IBIT). This ETF has ignited a significant fear of missing out (FOMO) among investors, as evidenced by the massive $3.3 billion trading volume it recorded on Tuesday, reaching its highest levels in six months. Over the past two weeks, IBIT has been spearheading inflows, suggesting that institutional FOMO is in full swing before the U.S. election results, which are due within a week.
BlackRock Bitcoin ETF Leads $870 Million Inflows
On Tuesday, October 29th, U.S.-based Bitcoin Exchange-Traded Funds (ETFs) received approximately $870 million in investments, with BlackRock’s IBIT fund accounting for roughly $640 million of that total. This influx is one of the largest since these ETFs were launched, with the current record being set on March 12, 2024, at $1.045 billion. With the recent surge in interest, there’s a good chance a new record could be set soon.
Since IBIT’s launch, its net inflows have nearly hit $25 billion, surpassing Fidelity’s FBTC by more than double. This substantial increase in investments persists during the ongoing surge of the broader cryptocurrency market, as Bitcoin prices edge closer to their record highs.
Yesterday, Eric Balchunas, Bloomberg’s ETF strategist, pointed out an exceptional trading volume of $3.3 billion in the BlackRock Bitcoin ETF. He finds it unusual because usually, ETF activity increases significantly during market declines, not when markets are relatively stable or rising as appears to be the case here.
As a researcher delving into the dynamics of cryptocurrency markets, I’ve come to consider the possibility that the surge we’re currently experiencing might be fueled by FOMO – the fear of missing out on potential gains, given the sustained Bitcoin price rally we’ve witnessed in recent times.
The Bloomberg strategist went on to explain that IBIT wasn’t the only Bitcoin ETF experiencing increased trading activity yesterday, as other similar ETFs saw a significant surge too. Given this trend, he speculates that this could be a buying wave fueled by fear of missing out (FOMO). Balchunas also pointed out that if this is indeed a FOMO-induced frenzy, we might see considerable inflows in the coming days as a result.
Today, IBIT traded an impressive $3.3 billion, marking its highest volume in six months. This is somewhat unusual because Bitcoin increased by 4% today, and usually ETF volume surges during downturns or crises. However, there are instances where volume can spike due to a fear-of-missing-out (FOMO) frenzy similar to the situation with $ARKK in 2020. Given the recent increase in price, it seems plausible that this surge could be due to…
— Eric Balchunas (@EricBalchunas) October 29, 2024
Bitcoin All-Time High Soon?
Over the last week, Bitcoin’s price has surged by 8%, nearing a mere 5% from its peak record value. Currently, Bitcoin is being traded at $72,267, a 1.75% increase as of this writing, with a total market capitalization of an impressive $1.429 trillion. Yet, the widespread excitement among retail investors (FOMO) in Bitcoin hasn’t fully materialized as predicted by crypto analyst Miles Deutscher, despite significant investments flowing into Bitcoin ETFs.
#Bitcoin nears record peaks, yet retail enthusiasm remains minimal.
Higher.
— Miles Deutscher (@milesdeutscher) October 29, 2024
In the previous two upward trends of Bitcoin, it was mainly the enthusiasm of individual investors that pushed prices to record highs. This implies that big investors and significant Bitcoin holders are currently controlling the market’s movement. Consequently, when fear of missing out (FOMO) among retail investors intensifies, we might witness a surge in price reaching or even exceeding $100,000.
As a researcher, I’ve noticed that a significant bullish signal comes from the Bitcoin MVRV (Mempool Value in Days) ratio. Recently, this ratio has soared beyond its 365-Simple Moving Average (SMA), which historically has heralded major bullish trends. Additionally, it seems we’re witnessing a ‘golden cross’, where the short-term moving average surges above the long-term one, further suggesting an upward price movement for Bitcoin.
Even though Bitcoin is currently trading at around $72,000, it might seem like a late entry to some, but historical patterns suggest otherwise. The MVRV Ratio crossing above its 365-day Simple Moving Average has typically indicated significant bull runs in the past, and this recent instance of the “golden cross” is no exception!
— Ali (@ali_charts) October 29, 2024
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2024-10-30 08:02