Bitcoin’s journey in 2024 has encountered turbulence, despite the long-awaited approval of several exchange-traded funds (ETFs) aimed at enhancing its institutional credibility. However, there’s a silver lining as Bitcoin has surged above $45,000 per coin. According to CoinGecko data, the price of Bitcoin (BTC) currently stands at $45,395, marking a nearly 4% increase in the past day and over 5% in the past week.
So, what’s behind this resurgence? Analysts suggest various factors, including significant accumulation by prominent investors, commonly referred to as “whales,” are contributing to the asset’s upward trajectory.
BTC faced an unexpected setback following the approval of 10 Bitcoin ETFs in January. Despite briefly reaching $49,000, the asset experienced a downturn after Grayscale, one of the funds, began transferring substantial amounts of its crypto holdings to Coinbase. Grayscale’s conversion of its Bitcoin Fund into an ETF prompted investors to redeem their shares and cash out, resulting in a significant BTC sell-off. At one point, the price dropped below $39,000.
However, the sell-off appears to have subsided, and BTC is on the rise again, partly due to increased acquisition by major holders. Julio Moreno, head of research at CryptoQuant, noted that the sell pressure diminished as short-term holder unrealized profit margins reached zero, with more whales purchasing BTC this year. He highlighted that their total holdings are currently at their highest since November 2022, standing at 3.9 million BTC.
But there are other contributing factors as well. Craig Erlam, senior market analyst at OANDA, mentioned that there is a significant appetite for technology, driving investors to consider both Nasdaq-listed companies and cryptocurrencies. James Butterfill, head of research at CoinShares, suggested that ETF issuers may also be acquiring more BTC.
BTC ETFs have witnessed remarkable success since their introduction in January. These investment vehicles, which mirror the cryptocurrency’s price movements, have seen substantial inflows, with Bloomberg data indicating continuous cash inflows into the funds for nine consecutive days.
