November 27, 2024
By Our Correspondent
During the week of November 18-22, Bitcoin exchange-traded funds (ETFs) experienced notable inflows, with investors allocating $2.42 billion into spot Bitcoin ETFs. This influx represents the fourth-largest weekly investment since the inception of Bitcoin ETFs in January. The increase in Bitcoin investments coincided with a significant rise in its price, which reached $99,800 on November 22, highlighting Bitcoin’s growing status as a safe haven amid global financial uncertainties.
Conversely, ETFs based in China encountered an extraordinary outflow of $2 billion, marking the largest withdrawal in the history of the country’s ETFs. The iShares China Large-Cap ETF (FXI) saw $984 million in withdrawals, continuing a trend of negative flows for the fifth consecutive week. Despite substantial economic stimulus measures from the Chinese government, investor sentiment remains lackluster.
Recent data indicates that consumer confidence in China has declined by nearly 50 points over the past three years, raising alarms about a potential prolonged economic downturn. The recent surge in Bitcoin is perceived as a reaction to escalating economic instability, a phenomenon that has historically favored the cryptocurrency.
Previous crises, including the banking collapse in the U.S. in 2023, have contributed to Bitcoin’s growth, establishing it as a safeguard against risks associated with traditional financial markets. The latest price rally, which saw Bitcoin increase by 48% in November, is also linked to the outcomes of the U.S. presidential election, which ignited a wave of investor optimism.
As Bitcoin’s price reaches unprecedented heights, skepticism accompanies its swift ascent. Analysts, including Kris Marszalek, CEO of Crypto.com, warn that the cryptocurrency market may require a phase of deleveraging before Bitcoin can exceed the $100,000 mark. Nevertheless, the persistent influx of both institutional and retail investments into Bitcoin ETFs indicates a rising interest in this cryptocurrency as a decentralized alternative to conventional financial assets.
Bitcoin ETFs have now exceeded $100 billion in net assets, reinforcing their significance in the global investment arena. The recent increase in ETF inflows, coupled with Bitcoin’s ongoing price rally, highlights the evolving dynamics within the investment sector. With stablecoin inflows to exchanges approaching $9.7 billion this month, analysts remain divided on the likelihood of Bitcoin surpassing the $100,000 threshold by the end of November.
