The winds seem to have changed direction in the cryptocurrency market. Bitcoin (BTC) is regaining popularity among institutional investors. This renewed interest was also reflected in the increase in trading activity for spot Bitcoin exchange-traded funds (ETFs), reaching a two-week high on May 15. This positive change coincides with the release of key US inflation data on the same day. Consumer Price Index (CPI) data met expectations and led institutional investors to return to their bullish stance on Bitcoin. This optimism translated into a significant inflow of $303 million into spot Bitcoin ETF products in the US, marking the highest level since May 3.
Big entry into Bitcoin ETFs
Fidelity Digital Assets’ FBTC fund was a front-runner, attracting a massive inflow of $131 million on May 15. This represents the fund’s highest daily inflow since March 26 and represents a strong vote of confidence from investors. Bitwise Asset Management’s BITB fund also had a big day, recording inflows of $86 million, its best performance since the beginning of March.
Interestingly, BlackRock’s IBIT fund, another major player in the Bitcoin ETF space, posted zero inflows for the third consecutive trading day. However, experts say this is not a cause for concern and is attributed to the specific nature of the fund’s investment strategy.
Millennium Management also invested
A particularly interesting development emerged in the latest filings with the US Securities and Exchange Commission (SEC). Investment giant Millennium Management, which has over $64 billion in assets under management, surprised the market by unveiling a significant spot Bitcoin ETF portfolio worth a staggering $2 billion. This statement caused ETF analysts to say that the narrative that only retail investors were buying Bitcoin ETFs was no longer true.
Millennium’s portfolio consists of holdings in various Bitcoin ETFs, including $844.2 million in IBIT, $806.7 million in FBTC, and $202 million in Grayscale GBTC. Notably, they hold the largest position in both IBIT and FBTC, solidifying their bullish stance on the cryptocurrency. This news adds to the growing trend of traditional financial institutions and hedge funds looking to expand into the Bitcoin market through ETFs.
BTC price reacts positively to Bitcoin ETF data
cryptokoin.com As we reported, the increase in ETF inflows coincided with a significant increase in the price of Bitcoin. The leading cryptocurrency is up a staggering 7% over the past 24 hours, reaching $66,567 during early Asian trading on May 16. At the time of writing, Bitcoin is hovering around $65,900, reflecting a 15% increase over the past two weeks and putting it within just 10% of its all-time high.
The positive sentiment surrounding Bitcoin can be partially attributed to recently released US inflation data. April CPI data came in below expectations at 0.3%, indicating a potential slowdown in inflation. This news was welcomed by investors because it raises the possibility that the Fed will lower interest rates and inject more liquidity into the market. Such actions often benefit high-risk assets such as cryptocurrencies.
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