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BlackRock’s spot Bitcoin exchange-traded funds (ETF) iShares Bitcoin Trust, trading under the ticker “IBIT,” has recorded inflows for 69 consecutive days, according to a social media update from Bloomberg Intelligence ETF analyst Eric Balchunas.
The fourth Bitcoin halving occurred late on Friday at block height 840,000, signifying a significant shift in the cryptocurrency’s supply dynamics. This halving event takes place roughly every four years and has decreased the mining reward from 6.25 to 3.125 bitcoins.
Waking up on 4/20 to see $IBIT took in cash for the 69th straight day, which was also the halving. It’s a little too perfect https://t.co/7Z8W3t9L7h
— Eric Balchunas (@EricBalchunas) April 20, 2024
The Bitcoin halving has consequently initiated a supply squeeze. These reductions are part of a predetermined strategy aimed at capping the total supply of Bitcoin at 21 million, thereby increasing its scarcity by halving the rate at which new coins enter circulation.
Recent data from Farside Investments indicates that Bitcoin ETF inflows are once again picking up speed after a period of reduced activity, despite the highly anticipated bullish Bitcoin halving event.
Geopolitical Risk in the Middle East Impacting Market
The escalating conflict between Israel and Iran has influenced the Bitcoin price. Last week, Bitcoin experienced a sell-off and volatility due to the military developments in the Middle East. Typically, Bitcoin is regarded as a safeguard against global uncertainty. On Monday, Bitcoin’s price remained steady, trading around $66,300.
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“One financial consequence of the conflict in Israel was the strengthening of the Dollar, as reflected by the U.S. Dollar Index. This indicates a shift towards safety. Portfolio managers tend to decrease their exposure to high-volatility assets in such circumstances. Bitcoin has historically exhibited one of the highest volatilities in a portfolio that includes stocks and bonds. Therefore, portfolio managers may sell Bitcoin to effectively lower their portfolio volatility,” stated Basile Maire, a co-founder of D8X, a decentralized exchange, in an interview with Cryptonews.
Macro-Driven BTC Price Largely Driven by Bitcoin ETF Trading
Maire further elaborated that similar Bitcoin price movements were observed earlier this year, coinciding with a strengthening Dollar or a flight to safety. These political events typically have a transient effect on financial markets.
“It appears that macro-driven price influences on Bitcoin are primarily triggered by Bitcoin ETF trading rather than crypto-native trading. The introduction of ETFs also seems to amplify the effects of macro-events on Bitcoin prices,” Maire remarked.
“From a portfolio management perspective, it is reasonable that Bitcoin and other cryptocurrencies may face sharper declines compared to stocks and other conventional assets in this context,” Maire explained.
This does not negate Bitcoin’s potential as a hedge against global uncertainty over the long term.
The post BlackRock’s IBIT ETF Sees Cash Inflows for 69 Days Straight appeared first on Cryptonews.
