Fresh money has returned to U.S. Bitcoin exchange-traded funds over the past six days, helping lift the price of the largest cryptocurrency after weeks of weak flows and uneven trading.
Data from Farside Investors cited in the report shows that nearly $1 billion has gone into the funds since last Tuesday. ETFs managed by BlackRock, Morgan Stanley, and Grayscale took in more than $930 million during the six-day run.
Bitcoin climbed back above recent lows
Bitcoin was recently trading at about $65,860, down slightly over the past 24 hours but up 1% over the last seven days. The asset reached a weekly high of $66,891 a day earlier.
Even after that recovery, Bitcoin remains nearly 50% below its October record of $126,080, the article said. It added that a major liquidation event, war in the Middle East, and inflation had all weighed on the asset.
CoinShares sees a floor, but not much upside
The article said analysts remain cautious about the path ahead for digital assets as markets deal with a renewed escalation in the Trump administration’s conflict with Iran and inflation concerns.
European asset manager CoinShares said last week that investors are once again putting new money into Bitcoin through exchange-traded products, but other forces could keep the broader digital asset market from moving much higher.
“We have said for some time that Bitcoin has probably reached, or is close to, its floor,” James Butterfill, head of research at CoinShares, wrote. “But we see no significant upside potential from here. Current macroeconomic headwinds, such as the US bombing Iran and rising oil prices, could see inflation go up again.”
The report also noted that Bitcoin has typically performed well when inflation appears to be cooling, because investors then expect interest rates to come down.
NYDIG points to supply mechanics
A separate report from NYDIG last week argued that Bitcoin’s current weakness is tied more to supply mechanics than to risk sentiment.
According to that report, Bitcoin has been the worst-performing asset on a year-to-date basis, trailing U.S. Treasuries, silver, and currencies such as the Swiss franc. It added that if Bitcoin were to match the scale of previous drawdowns, including the 2022 bear market, a possible cycle low near $38,000 to $39,000 could not be ruled out.
This article first appeared in Bitcoin Magazine and was written by Mathew Di Salvo.