Key Takeaways
Bitcoin’s rise to $80,000 is attributed to strong institutional demand through spot Bitcoin ETFs, rather than retail FOMO.
Shortly after the US presidential elections, spot Bitcoin ETFs saw approximately $2.3 billion in net inflows.
According to Cameron Winklevoss, co-founder of Gemini, Bitcoin reached $80,000 primarily due to consistent institutional demand via spot Bitcoin ETFs, not retail investor activity.
He believes that this sustained institutional demand is a positive indicator for long-term bullish sentiment, suggesting that the current market cycle is still in its early stages.
Winklevoss stated, “The path to $80k bitcoin was paved with steady ETF demand. Not retail FOMO. Little fanfare. People buy ETFs, they don’t sell them. This is sticky HODL-like capital. Floor keeps rising. We just won the coin toss, innings haven’t started.”
The performance of US crypto ETFs this week was greatly influenced by the results of the presidential elections. Following Trump’s declaration of victory on November 5, spot Bitcoin and Ethereum ETFs changed their trend.
According to data from Farside Investors, eleven spot Bitcoin ETFs attracted around $622 million in net inflows on Wednesday. Despite experiencing outflows that day, BlackRock’s IBIT achieved a record $4.1 billion in trading volume.
IBIT then saw over $1 billion in net inflows on Thursday, raising its assets under management to over $33 billion. The ETF has now surpassed the size of BlackRock’s iShares Gold Trust (IAU).
In total, US spot Bitcoin ETFs gathered approximately $2.3 billion in net inflows during the three trading days following Election Day. Other crypto products also saw benefits, with spot Ethereum ETFs receiving nearly $218 million from Wednesday to Friday, according to Farside Investors data.
Classic supply-demand dynamics
Bitcoin is experiencing a strong performance, thanks to a combination of factors. Institutions are acquiring Bitcoin through ETFs, while the halving event has reduced supply. These factors may drive Bitcoin’s price to six figures, as suggested by Bitwise CIO Matt Hougan.
Hougan also anticipates that global monetary adjustments, such as China’s stimulus measures and the Fed’s interest rate decision, will further boost Bitcoin prices.
On Thursday, the Fed and the Bank of England continued to ease monetary policies by implementing 25-basis-point rate cuts. This followed the Fed’s more aggressive 50-basis-point reduction in September.
