Bitcoin has returned to attention due to a surprising comeback. Digital asset investments saw an impressive increase of $326 million within seven days. This extraordinary boost, the biggest since July 2022, mirrors heightened positivity from investors. Much of this optimism is heavily influenced by ideas that the US Securities and Exchange Commission (SEC) is close to giving the nod for a Bitcoin ETF focusing on spot prices.
This influx of fresh investment points to a notable change in the crypto ecosystem. This week saw a sizable increase in digital asset investment, ranking 21st highest ever. This shows investors are careful. But, industry leaders hope for a Bitcoin ETF approval soon, a big regulatory step forward.
Digging into the investment data, the U.S. only made up 12% of inflows, about $38 million. This could mean U.S. investors are waiting, possibly for the SEC’s decision on the ETF. Most investments came from Canada, Germany, and Switzerland, at $134 million, $82 million, and $50 million each. Plus, Asia hit a record for weekly investment at $28 million, showcasing digital assets’ worldwide appeal.
Bitcoin became the main player, receiving an incredible 90% of all investments, amounting to $296 million. Importantly, the rise in BTC prices led to a boost of $15 million into Bitcoin short-term investments. A player in the world of digital assets, Solana experienced an impressive $24 million increase in investments. Unlike others, Ethereum had continued outflows, reaching $6 million.
Insight Report: ‘Breaking down Bitcoin’s Rally’
At the same time, another market analysis firm, Kaiko, published a report titled “breaking down bitcoin’s rally.” The report demonstrates how market dynamics have changed to include increased trading volumes and unpredictability. There was an increase in market activity, which occurred after a false announcement related to a Bitcoin ETF was disseminated, pushing BTC to its peak since May 2022. Other coins like altcoins have also benefitted, with trade volume rising beyond $15 billion on centralized platforms.
Let's break down #BTC's latest rally👇
Trade volume hit 6-month highs as bitcoin crossed $34k, the first shift in market structure since the spring. pic.twitter.com/ih0L7QGwy6
— Kaiko (@KaikoData) October 30, 2023
Liquidity levels have stayed relatively steady despite the increased activity, indicating that market makers have not changed their behavior much. A significant impact has been felt in the derivatives markets as funding rates for Bitcoin perpetual futures have increased, indicating a more optimistic outlook. Following a string of liquidations, open interest is gradually rising again.
Moreover, BTC’s expected instability has shown a steady increase, particularly in the near future. It hints at predictions of escalated brief unrest in December, yet with no significant triggers. Meanwhile, the SEC is preparing to review ARK & 21Share’s request for a Bitcoin ETF spot in January.
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