Bitcoin is on the verge of a breakout, with institutional demand and increasing ETP flows indicating a surge in interest in the cryptocurrency. According to VanEck’s latest report, the growing investment from institutions, rising miner holdings, and the uptick in ETP flows are all pointing towards a bullish trend for Bitcoin.
One key point highlighted in the report is the strengthening correlation between ETP flows and Bitcoin’s price movements. Data showed that institutional inflows into US Bitcoin ETPs reached $19.4 billion by mid-October, with institutional money playing a significant role in driving price discovery. The strong correlation between ETP inflows and Bitcoin returns, indicated by an R² value of 0.3422, suggests that institutional investors are increasingly influencing Bitcoin’s price movements.
VanEck’s head of digital assets research, Mathew Sigel, emphasized the impact of institutional participation on Bitcoin’s price, stating that it reinforces Bitcoin’s position as a key asset in the global financial system. The report also noted that daily ETP flows have shown predictive power for Bitcoin price changes, particularly in after-hours trading, underscoring the influence of institutional inflows on the market.
Bitcoin is increasingly being viewed as a “macro-hedge” against economic instability and market volatility. Institutional investors are turning to Bitcoin as a way to protect their portfolios from inflation, currency devaluation, and geopolitical uncertainty. The report pointed out that publicly traded miners and major corporations, such as Japanese real estate manager Metaplanet, are accumulating Bitcoin, signaling confidence in its long-term prospects.
Market sentiment around Bitcoin has improved significantly, with nearly 90% of Bitcoin addresses now in profit. The cryptocurrency’s dominance in the market has increased to 57%, reaching levels not seen since April 2021. Bitcoin’s resilience in the face of regulatory scrutiny, particularly in the US, has also been highlighted, further solidifying its position as a safe-haven asset.
US and European traders have been driving Bitcoin’s price performance, with the asset seeing gains during trading hours in these regions. The pattern of Asian markets selling Bitcoin to US and European buyers remains consistent, with demand from Western markets offsetting selling pressure from Asia.
Overall, the data and analysis presented in VanEck’s report paint a positive picture for Bitcoin’s future growth and adoption, with institutional demand and ETP flows playing a crucial role in driving the cryptocurrency’s price movements.