Posted December 19, 2024 at 4:00 pm EST.
Spot BTC and ETH exchange-traded funds (ETFs) extended their streaks of uninterrupted inflows to new records, highlighting abiding demand for the investment vehicles following this week’s jitters across both cryptocurrencies and traditional markets.
For 15 consecutive days excluding weekends, the spot BTC ETFs trading in the U.S. have racked up daily net flows (the difference between inflows and outflows) averaging $448.5 million, data from SoSoValue shows.
Wayne Vaughan, CEO of blockchain tech firm Tierion, said on X Thursday that BlackRock’s spot bitcoin ETF, trading under the ticker $IBIT, is expected to surpass the SPDR Gold Shares ETF ($GLD) “within weeks.”
“Bitcoin is overtaking gold faster than anyone expected,” Vaughan said.
Eric Balchunas, senior ETF analyst at Bloomberg, wrote on X wrote that it’s a “near lock that $IBIT passes $GLD as the king of store of value ETFs.”
The $IBIT fund currently has 78% of $GLD’s assets, according to Balchunas.
The record streak for spot BTC ETFs comes as bitcoin mining firm MARA Holdings revealed on X early Thursday that it acquired 15,574 BTC for roughly $1.5 billion at $98,529 per bitcoin, with plans to acquire more.
The company paid for the cryptocurrency using the proceeds from its $1.9 billion raise last month and in December from selling 0% convertible notes. According to a Wednesday filing with the U.S. Securities and Exchange Commission, MARA Holdings has 44,394 BTC, worth $4.4 billion at the current price.
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The demand for bitcoin continues to rise as shown by the activity of accumulator addresses, or investors who buy bitcoin and have never sold, according to blockchain analytics firm CryptoQuant, in a report published Thursday.
“The balance of accumulator addresses is expanding at a record-high monthly rate of 495K Bitcoin,” according to CryptoQuant.
CryptoQuant added that the demand has been predicated partly on expectations for a favorable regulatory environment when former President Donald Trump returns to the White House early next year.
Trump has affirmed his support for a U.S. government reserve of BTC, but states are also moving to stockpile the cryptocurrency.
Ohio state representative Derek Merrin on Tuesday introduced the Ohio Bitcoin Reserve Act, which aims to establish a BTC fund in the state treasury, according to the politician’s tweet on Tuesday.
The extra demand has shrunken the supply of bitcoin easily available for sale to the lowest since October 2020.
“Total sell-side liquidity is 3.397 million bitcoin today, the lowest level in more than four years,” according to CryptoQuant. “This includes bitcoin on exchanges, miners, OTC desks and GBTC.”
Over-the-counter desks are witnessing their largest monthly reduction in bitcoin inventory this year so far, the report added.
The current sell-side inventory can cover BTC demand for 6.6 months, down from 41 months at the start of October.
”The amount of Bitcoin readily available for sale is shrinking even further relative to demand growth,” according to CryptoQuant.
Ethereum Spot ETFs on a Roll Too
The nine spot Ethereum ETFs listed in the U.S. have had 18 straight days of net inflows. From Nov. 22 to Dec. 18, these spot ETH ETFs have had a total netflow of $2.4 billion, a stark contrast to negative readings that have predominated since the inception of the financial instruments, per SoSoValue.
Cumulative netflows of spot ETH ETFs flipped positive in November for the first time since their July launch.
In another sign of demand for ETH, World Liberty Financial, a DeFi project backed by Trump and his family members, has been actively transacting on the Ethereum parent chain.
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On the first day of spot ETH ETFs’ streak, World Liberty Financial had a balance of roughly $24 million, and as of Thursday, the Trump-linked project has a balance of $79 million, a nearly 230% jump, per on-chain data firm Arkham Intelligence.
With ETH making up almost 68% of its total balance, World Liberty Financial also holds the Ethereum-based tokens wBTC, USDC, USDT, AAVE, LINK, ENA and ONDO, collectively exceeding $25 million.
Markets Shed Value in the Last 24 Hours
Despite the inflows for U.S.-listed spot BTC and ETH ETFs, the two cryptocurrencies have dropped in the last 24 hours. Bitcoin dipped 4.6% in the last 24 hours to trade below $97,000 on crypto exchange Binance, while ether dropped harder, slipping 8.5% in the same period to under $3,380 on Coinbase.
Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom Fund, predicts that the market could be due for a harsh correction in early 2025.
“Before we get to the crack-up boom phase in this crypto bull market, I believe the crypto markets will experience a harrowing dump around Trump’s Jan. 20 inauguration day,” Hayes wrote in an essay published Wednesday.
“The market believes that Trump and his people can immediately achieve economic and political miracles,” Hayes wrote, but “the issues that gave rise to Trump’s popularity are decades in the making.”
He argued that there are “no immediate solutions regardless of what Elon Musk tells you on X.” Hayes indicated that Maelstrom plans to lighten up on particular positions in hopes of getting back in at lower prices in the first half of 2025.
“We are committed to admitting defeat if the bull market steamrolls through Jan. 20, licking our wounds, and getting back on the bull,” Hayes wrote.
