U.S. Bitcoin ETF inflows hit record, indicating imminent breakthrough to record high?

Bitcoin’s value is edging closer to an all-time high, helped by a continued surge in ETF investment.

Exchange-traded funds (ETFs) in the United States that directly invest in Bitcoin (BTC) have achieved net inflows for 18 consecutive days, making a significant contribution to Bitcoin's approach to a new all-time high (ATH).

Data compiled by Bloomberg show that since their launch on January 11, net subscriptions for nearly a dozen Bitcoin ETF products reached $15.6 billion on Thursday, raising total assets to $62.3 billion.

According to Bloomberg, Bitcoin funds offered by major players such as BlackRock Inc. and Fidelity Investments have become one of the most successful debuts in the history of the ETF space. The report also states that the cryptocurrency industry’s center of gravity is shifting from Asia back to the United States.

ETF’s expected impact on interest rate cuts

Demand for ETFs, along with expectations of future Federal Reserve interest rate cuts, are considered key factors in considering Bitcoin could surpass its recent all-time high of $73,798 by the end of June.

Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, noted the huge inflows into spot Bitcoin ETFs and said the current macroeconomic environment continues to be favorable for cryptocurrencies, with economic growth slowing But it did not slip into recession, and inflation showed signs of slowing.

Additionally, BlackRock’s $21.4 billion iShares Bitcoin Trust has become the largest Bitcoin fund in the world, surpassing Grayscale Investments LLC’s $20.1 billion Bitcoin Trust. Fidelity Wise Origin Bitcoin Fund ranks third with $12.3 billion.

SEC moves to approve Ethereum ETF

The U.S. Securities and Exchange Commission (SEC) had to reluctantly approve the launch of a spot Bitcoin exchange-traded fund (ETF) in January after experiencing a reversal of court rulings in 2023.

Then, in May, the SEC unexpectedly changed its attitude and approved financial support for Ethereum, the world's second-largest cryptocurrency, a decision that marked a major shift in its regulatory attitude.

However, the SEC, led by Chairman Gary Gensler, has been critical of the digital asset industry’s alleged noncompliance.

Meanwhile, congressional efforts to provide legislative clarity for cryptocurrencies have gained momentum recently, with more support from the Senate and federal judicial courts to combat SEC overreach in other areas such as traditional finance and banking.

Conclusion:

With the record inflows of Bitcoin ETFs in the U.S. market and the SEC's gradual change in its attitude towards cryptocurrency regulation, the cryptocurrency industry is ushering in a new stage of development. The active participation of large financial institutions such as BlackRock and Fidelity not only injects confidence into the market, but also paves the way for mainstream adoption of cryptocurrencies. Despite facing intense scrutiny from regulators, the industry's self-adjustment and support from legislators provide a solid foundation for the future development of cryptocurrencies.

At the same time, the optimization of the macroeconomic and regulatory environment is expected to drive cryptocurrencies such as Bitcoin to continue to attract investment and may quickly reach new highs. This will also promote widespread adoption and deep integration of the cryptocurrency ecosystem, while enhancing the United States’ status as a global center for cryptocurrency innovation.

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