Investors Relieved as Bitcoin ETFs See $31 Million Net Inflows
Investors can breathe a sigh of relief as net inflows in U.S. spot Bitcoin ETFs exceeded net outflows by $31 million for the first time in two weeks, according to data analytics platform SoSovalue. This newfound confidence in Bitcoin from institutional investors has coincided with the Bitcoin price recovering from $59,495 to $61,485, an increase of 3.5% after Bitcoin breached the $60,000 mark on June 25.
Major Funds at a Glance
Fidelity’s FBTC fund saw the highest inflow of $49 million, while Bitwise’s BITB fund witnessed an inflow of $15 million. However, Grayscale’s GBTC fund recorded the highest outflow of $30 million. In the previous five trading sessions, Bitcoin ETFs experienced a significant sell-off, with net outflows hitting $714 million. The sell-off peaked on June 24, when Mt. Gox trustees announced that creditors would start receiving reimbursements from next week.
Factors Influencing Bitcoin’s Price Increase
Another major factor in Bitcoin’s price increase is likely derivatives liquidations. Nearly $62 million worth of shorts have been liquidated, accounting for the vast majority of liquidations in the past 24 hours. A trading desk note from Off the Chain Capital, shared with Decrypt, suggests that Mt. Gox creditors might not be keen on selling their decade-old holdings once they start receiving reimbursements next week.
Brian Dixon, CEO of Off the Chain Capital, wrote in the note: “Once the Mt. Gox distributions are made, I believe the market will generally not start dumping the assets right away because I don’t see as many claim holders selling their Bitcoin once received as may have happened if they received it several years ago.” He added that Bitcoin has matured significantly since Mt. Gox filed for bankruptcy in 2014.
Long-Term Holders’ Perspective
“A claim holder must ask themselves if they need this cash for something, or if it’s better to hold Bitcoin as a long-term store of value," Dixon wrote, highlighting that BTC has been the best-performing asset for 12 of the last 15 years. This sentiment was echoed by Alex Thorn, Head of Research at Galaxy Research.
Thorn tweeted: "Creditors have been stuck in Mt. Gox bankruptcy for 10+ yrs—finally trustee says in-kind distribution of BTC BCH will begin in July. We think fewer coins will be distributed than people think & that it will cause less bitcoin sell pressure than the market expects.” In a follow-up tweet, Thorn noted that individual creditors are unlikely to sell their proceeds as they are long-term holders. He also mentioned that selling their reclaimed BTC would incur a significant capital gains tax for U.S. creditors, given Bitcoin’s substantial rise in value over the past decade.
Conclusion
This renewed confidence in Bitcoin, highlighted by net inflows into Bitcoin ETFs and the expectation that Mt. Gox creditors will hold onto their Bitcoin, paints a positive future for the cryptocurrency. With institutional support and long-term holder sentiment, Bitcoin appears poised for sustained growth.
