Bitcoin took some mammoth steps during week 6 and added a massive 110 billion dollars to its market cap. Many feared that the highs during January would be the highest bitcoin would go (short-term), but starting on the 8th of February, BTC took on an impressive rise towards 50.000 dollars - a huge leap from the price action of week 5.
The NBX Visa credit card gives you up to 4% Bitcoin cashback. Learn more here and check out our RWA NFTs here.
Starting the week at 43.014 dollars, Bitcoin experienced a high/low of 48.487/42.317 dollars, respectively. By the end of the week, Bitcoin closed at 48.124, representing a mammoth 11,87% increase. Trading volume fluctuated between 7 and 42 billion dollars.
The correlation between inflows/outflows to the most prominent BTC spot ETFs seems to be the most likely cause as to why Bitcoin rose over 10% in a few days. Spot BTC exchange-traded funds (ETFs) saw their third-largest influx on February 8th, amounting to 403 million dollars. This surge brought the total inflow into spot Bitcoin ETFs to over $2.1 billion since their launch on January 11th, indicating robust demand. The uptick coincided with Bitcoin's price surpassing 46.000 dollars, nearing its highest levels of the year.
As the halving event is closing in for each passing day, more and more are beginning to tie the inflows and demand of the ETFs to the basic mechanism of the halving. According to Grayscale, the price of Bitcoin at the current levels amounts to about 15 billion dollars in needed buying pressure in order for Bitcoin to maintain its price as the payout is 6,25 BTC per block. Post halving, the buying pressure, following the same rule of thought, will be half of what it is today in order to maintain the same price, all else being equal.
In other words and as we all know, Bitcoin halvings has historically been the start of a bull run for Bitcoin. Now, with the increased demand from ETFs, it is beginning to look like the perfect storm.
This text is intended to inform and is not an investment recommendation.
Best regards,
Adam Jakobsen.
NBX.
