Bitcoin ETF Records Inflows After Bottoming Out Favoring Self-Custody Investors
Bitcoin appears to have found a sturdy floor, as dip buyers have emerged with conviction from institutional and individual investor camps.
Available data points to heavy accumulation from self-custodial holders, while exchange-traded funds (ETFs) have also begun seeing modest inflows after a period of selling.
The flurry of dip-buying activity coincided with Bitcoin's descent to the lower $25,000 range, representing a significant test of the cryptocurrency's newly established bull market.
According to analyst Willy Woo, the resounding vote of confidence from investors at those levels has reinforced the market's overall uptrend.
We're witnessing the sort of peat-moss-like bid behavior that anchors secular bull markets," said Scath Arken, head of digital asset strategy at Nasdaq-listed Bitwise Asset Management.
The market's proven it can absorb sizable sell-side liquidity events at critical technical levels without skipping a beat." The most eye-opening statistic from the latest markdown in Bitcoin prices comes from blockchain data analysts at Glassnode.
Their on-chain monitoring has detected an enormous uptick in smaller investors and self-custodial pleb" buyers gobbling up Bitcoin from exchanges.
Glassnode's Bitcoin Non-Zero Address" metric, which tracks the number of wallets holding a non-zero amount of BTC, has exploded higher this month.
Over 100,000 new participants have flooded into the asset during the recent sell-off - continuing a trend that began in earnest amid last year's FTX blowup.
While Main Street stampedes onto the Bitcoin blockchain one pleb at a time, the smart money set hasn't stopped adding further exposure. After a brief spate of outflows in early March, Bitcoin ETF products are seeing fresh demand from institutional investors returning to hit the buy side.
Institutions Buying into Bitcoin ETFsThe bellwether Purpose Bitcoin ETF soaked up some $30 million in new buy-side flows last week, representing its most substantial period of inflows since January.
Other leading ETFs like the ProShares Bitcoin Strategy ETF have also seen a return to the bid after a stretch of relentless selling, fueled in part by tax-loss harvesting at the end of 2023.
You never want to read too much into short-term fund flow data, as there's always a fair bit of noise in the signal," said Ananda Ridgewood of Wedbush Securities.
That said, we're certainly encouraged to see the fast money quickly returning to support this market as we reset to higher levels."
Elsewhere, on-chain data analysis also points to the re-accumulation of Bitcoin by more extensive institutional players known as the wealthy whale" cohort. According to researchers at santiment, whale wallets controlling more than 10,000 BTC have been rapidly expanding their holdings.
The whales have been going after price-insensitive strategies with laser-focused determination. Their buying has offset the more skittish shaking out of weaker hands amid the volatility." It added.
As regulatory frameworks slowly fall into place and adoption metrics steadily grind higher, Bitcoin appears poised to continue price growth.This might solidify its role as a bona fide asset class to contend with the traditional finance ecosystem.
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