Author: 636Marx

The trading volume of Bitcoin reached $5 billion yesterday, and on the 29th, it attracted an astonishing $870 million in funds. Currently, Bitcoin is only $157 away from its all-time high of March 14 this year. Major institutions like BlackRock and Fidelity Investments play a key role, as their ETFs attract significant investments. In particular, BlackRock's iShares Bitcoin Trust has garnered over $523 million, setting a record high since March. With Bitcoin prices soaring, investing in Bitcoin through ETFs is increasingly seen as a wise choice.

The Rise of Bitcoin and the Allure of ETFs

Multiple factors have driven the recent price increase of Bitcoin, including broader economic conditions and regulatory progress, which have bolstered institutional investor confidence. This month, Bitcoin's price reached approximately $73,620, marking a new high in this bull market. At the same time, Bitcoin spot ETFs (especially those launched in 2024 by major companies like BlackRock and Fidelity) have witnessed unprecedented inflows—some exceeding $550 million in a single day. Notably, BlackRock's iShares Bitcoin Trust (IBIT) has become one of the top three most popular ETFs in the U.S. this year, managing about $22.8 billion in assets—a remarkable surge for a product that was only launched in January.

The appeal of ETFs lies in their packaging of Bitcoin within traditional financial instruments regulated by the U.S. Securities and Exchange Commission, thereby bridging the gap between the crypto market and institutional investors. This structure not only enhances confidence in its stability but also simplifies tax considerations. Bitcoin spot ETFs have transformed the landscape of the digital currency bull market, a realization I have come to in recent days.

How Do "Blue Chip" Crypto Assets and Niche Digital Currencies Rotate?

Contrary to popular belief, the market rotation signifies a shift of funds from niche digital currencies to more "blue chip" crypto assets, such as Bitcoin and Ethereum. In a persistently uncertain financial environment, Bitcoin, as "digital gold" or an inflation hedge, attracts institutional capital away from smaller, riskier assets.

Ethereum will also benefit from this wave of increase, albeit to a lesser extent. Although there have been unique surges today, like that of SUI, the ongoing capital flow is primarily directed towards Bitcoin, which first strengthens investor confidence in major assets. Just as reproductive rights were once only circulated among the wealthy in ancient times, the poor cannot escape poverty for three generations, as marginally wealthy individuals rotate into new poverty.

Why is Only Bitcoin Rising in the Entire Digital Market?

I believe the most direct reason for Bitcoin's rise is the recent approval of multiple Bitcoin spot ETFs by the SEC, marking a shift in regulatory attitude, which mainstream capital views as a recognition of Bitcoin's legitimacy in the U.S. financial sector. Financial giants like BlackRock, Fidelity, and Bitwise launching ETFs bring Bitcoin closer to mainstream acceptance, making it easier for Old Money, which was previously cautious about direct digital currency investments, to participate.

For retail investors, they can only see the market's prosperity and intensified competition. In the long run, institutions lowering ETF fees will further encourage retail participation. Although institutional capital currently dominates, the expansion of ETF options provides a simple entry point for the vast retail market into the digital currency space. Therefore, only Bitcoin is rising, and there is no rotation effect among smaller coins as seen in previous bull markets; the rotation effect on older coins ranked lower will diminish.

Is Bitcoin's Continuous Rise Temporary Volatility?

As Bitcoin's price approaches its historical high, I cannot assert whether this rise will be sustained. However, the inflow of ETF funds indicates Old Money's confidence, but Bitcoin's value may fluctuate rapidly due to economic factors and new regulations. The purchase of Bitcoin by Old Money differs from investments in the crypto space, as it may help hedge against economic risks.

I believe that Bitcoin's price needs to strike a balance between innovative financial concepts and traditional finance. To gain more funds and attention, BTC must change its price trajectory, and of course, this can be referenced against spot gold. This bull market may help Bitcoin become a serious financial asset.