Bitcoin ETFs Poised to Surpass 1M BTC with November Tailwinds on the Horizon
U.S. Spot Bitcoin ETFs on Track to Hold 1 Million BTC Amid $3B Inflows, Driven by Fed Policy, Russia’s Crypto Shift, and Election Buzz.
Key Takeaways:
- U.S. spot Bitcoin ETFs may reach 1 million Bitcoin in holdings this week.
- The upcoming U.S. election, the Fed’s rate cut, and Russia's lift on the Bitcoin ban are the drivers.
- Bitcoin ETFs recorded $3 billion in inflows in the last two weeks.
As traders prepare for potential gains in November, the U.S. spot Bitcoin exchange-traded funds (ETFs) could soon reach 1 million Bitcoin in holdings, possibly by the end of this week.
Several factors may drive this growth, including the upcoming U.S. presidential election, the possibility of the Federal Reserve lowering interest rates, and Russia lifting its Bitcoin mining ban.
Bitcoin ETFs Need $1.55 Billion to Acquire 23,107 Bitcoins
Recent data from SoSoValue indicates that U.S. spot Bitcoin ETFs currently hold 976,893 Bitcoin, valued at over $66.2 billion, representing approximately 5% of Bitcoin's total market capitalization of $1.34 trillion. This is a whopping increase in July when it was around $650 million.
https://twitter.com/NateGeraci/status/1850692964642586916
To reach the milestone of 1 million Bitcoin in holdings, these Bitcoin ETFs must acquire an additional 23,107 Bitcoin. At current prices, this translates to approximately $1.55 billion in required net inflows. Meeting this goal within a week would require sustained daily net inflows of $301 million.
One of the most influential drivers is the Federal Reserve’s potential decision to lower interest rates. When interest rates drop, borrowing costs decrease, creating a more favorable investment climate. Investors often seek higher returns in alternative assets like Bitcoin during these periods.
Another crucial development is Russia’s intention to lift its Bitcoin mining ban on November 1, 2024. Historically, Russia has been a major player in the Bitcoin mining industry, and its re-entry could improve global Bitcoin production.
The upcoming US presidential election on November 5 is another key factor that could influence Bitcoin's trajectory.
As candidates Kamala Harris and Donald Trump compete for the presidency, their differing views on cryptocurrency will likely impact investor sentiment.
Trump has publicly embraced the cryptocurrency sector and promised to remove Securities and Exchange Commission (SEC) Chair Gary Gensler, which many believe could lead to a more favorable regulatory environment for Bitcoin and other digital assets.
Conversely, Kamala Harris's position on digital assets remains less clear, creating an element of uncertainty.
Historical patterns indicate that major political events can affect Bitcoin's price movements.
For example, after President Biden's victory and the May 2020 Bitcoin halving event, Bitcoin rallied nearly 43% in November 2020. This indicates that similar price trends could occur again, depending on the election's outcome.
Bitcoin ETFs Records $3 Billion Inflows Over the Last Two Weeks
Bitcoin analyst Alessandro Ottaviani pointed out that Bitcoin ETFs have seen a remarkable influx of $3 billion in the past two weeks. He explained that if this pace of inflows continues through November, a new all-time high for inflows will be inevitable.
This optimism is not just speculation – it aligns with notable purchases made by key ETF issuers in the market. Leading the charge is BlackRock, which has acquired 33,000 Bitcoin this month alone. Other prominent issuers, such as Fidelity and ARK Invest, are also recording substantial inflows, further emphasizing the increasing interest in Bitcoin ETFs.
The implications of these inflows are profound. With more capital entering the market, the price of Bitcoin is expected to rise.
Analyst Gautam Chhugani from Bernstein forecasts that Bitcoin could soar to $500,000 by 2029 and reach $1 million by 2033. This perspective reflects a growing belief that as Bitcoin becomes more mainstream, particularly through spot Bitcoin ETFs, its value will continue to climb.
As we move deeper into November, all eyes will be on the market to see if this momentum can be sustained, potentially leading to new all-time highs for Bitcoin in the near future.
Jimmy Aki
Drawing from his background in economics, Jimmy has monitored blockchain development for years, firmly believing in its power to democratise finance. Beyond offering commentary on the latest crypto developments, he also spends his time analysing open-source codes of promising projects on GitHub. Jimmy holds Bitcoin and Ethereum.
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