Bitcoin (BTC) has experienced significant price growth this year, driven by institutional investments following the approval of a spot ETF by the United States Securities and Exchange Commission (SEC).
Recent data from CryptoQuant, an on-chain analytics firm, indicates a bullish sentiment surrounding the market leader, contributing to the upward movement in its price.
The data reveals a rising number of Bitcoin Unspent Transaction Outputs (UTXOs) in the market, ranging from 1000 to 10,000 BTC. This trend has been steadily increasing since Q4 2023, coinciding with institutional investments in Bitcoin as anticipation for SEC approval grew.
These inflows triggered a price rally, eliminating losses incurred in 2022 and fostering a new optimistic outlook on the market. By December 2023, the asset’s price surged to $42,000, with many analysts predicting a post-approval price target of $50,000.
Institutional investments, amounting to millions, were reported across various products, boosting Bitcoin’s Assets Under Management (AUM) to over $36 billion.
Bitcoin Whales Become Active
While the approval of spot Bitcoin ETFs impacts both institutional and retail investors, there has been a notable surge in whale activity over the past 30 days.
“These amounts are more likely to be related to whales or institutional investors rather than individuals, especially since the recent approval of Bitcoin spot ETFs, which has seen a sharp increase,” stated analysts at CryptoQuant.
They noted that while these inflows do not reach the highs seen in 2021, they still reflect significant institutional involvement.
“In bull markets, after a notable influx of institutional investors, new individual investors typically enter the market, signaling the end of the bull run,” they added.
Following the approval, miners transferred $1 billion worth of BTC reserves to exchanges, with analysts attributing this move to the upcoming halving and the necessity to hedge towards larger facilities.
Subsequently, CryptoQuant’s data revealed nearly $1 billion leaving Coinbase for other custodians, characterized as a holding maneuver. This is significant as outflows from centralized exchanges often indicate a bullish sentiment.
Bitcoin Sees a New Era Post ETF Approval
On January 10, the long-awaited spot Bitcoin ETF received approval from the SEC, ushering in a new investment opportunity for traditional investors.
This approval has ignited a fresh surge in the market, driving up asset prices and attracting a wave of new investors. To date, Bitcoin ETFs have garnered $5.2 billion in net inflows, with over $1 billion recorded in the past seven days alone.
With Bitcoin’s Assets Under Management (AUM) reaching $48 billion, fueled by both the asset’s price increase and new market inflows, Bitcoin currently trades at $51,086. This marks a remarkable 26% surge in the last 30 days, coinciding with the wider market’s achievement of a $1.94 trillion market capitalization.
The success of spot Bitcoin ETFs has prompted institutional players to explore Ethereum (ETH) ETFs in the United States. Some analysts anticipate a similar influx of funds into ETH following expectations surrounding ETF approval.
