What's driving bitcoin prices & where are they headed next?
Bitcoin has surged by 8.08%, marking a 50.42% increase in the last month and an impressive 250% growth over the past year. Bitcoin has surpassed its previous all-time high, rising by 1% in the past 24 hours. Currently, it trades near $73,000.
The Surge Explained: Spot Bitcoin ETFs
The catalyst behind this surge is the U.S. Securities and Exchange Commission’s (SEC) approval of spot Bitcoin ETFs. These instruments allow investors to buy into Bitcoin without the complexities of direct crypto ownership, with each ETF share backed by real Bitcoin. This mechanism directly impacts Bitcoin's supply and demand, pushing prices upwards as each share purchase translates to actual Bitcoin being bought in the market.
Understanding Market Dynamics: The Investor Types
Bitcoin ETFs have been purchasing an average of 10,000 Bitcoin daily, vastly exceeding the daily mining output of just 900 Bitcoin. This results in a demand that exceeds supply by over ten times. The total assets under management for the top ten Bitcoin ETFs have skyrocketed to around $50 billion, with BlackRock's Bitcoin ETF at the forefront, accumulating $10 billion in assets, followed by Fidelity's ETF, which holds $6 billion in assets.
Institutional Interest Fuels the Rally
The slow but
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