The cryptocurrency market continues to soar in 2023, with Bitcoin (BTC) emerging as the top choice for institutional investors over the past two weeks. According to a recent report by CoinShares, Bitcoin’s investment products have witnessed a staggering $310 million in inflows in just 14 days.
This surge comes at a time when the approval of the spot BTC ETF by the Securities and Exchange Commission (SEC) remains uncertain.
Bitcoin Outshines Competitors
BTC has reclaimed its dominance after experiencing nine consecutive weeks of outflows. The report reveals that Bitcoin investment is on the rise, with this week alone bringing in $123 million in inflows. Conversely, short-BTC investment products faced outflows of $0.9 million, marking their tenth straight week of decline.
Bitcoin’s share of the market has reached 98% in the past two weeks, marking the second occurrence this year. Such dominance leaves no room for bearish sentiment, especially with Bitcoin’s price currently trading above $31,000.
While Bitcoin remains the center of attention, other cryptocurrencies have also witnessed positive figures. Ethereum led the pack with inflows of $2.7 million, while blockchain equities experienced inflows of $6.8 million, ending a nine-week period of stagnation. Altcoins such as Ripple (XRP), Cardano (ADA), and Polygon (MATIC) also recorded encouraging numbers, with Solana (SOL) posting $0.8 million in inflows.
Investor Sentiment and Outlook
James Butterfill, CoinShares’ Head of Market Research, highlighted the continued focus on Bitcoin among investors, emphasizing the high trading activity surrounding the cryptocurrency.
Butterfill stated,
“Bitcoin investment products are now back to a net inflow year-to-date, having shifted from a net outflow position of US$171 million just two weeks ago.”
Impact of Spot ETF Applications
The recent surge in Bitcoin’s market dominance can be attributed to the excitement generated by multiple spot ETF applications. It all started with BlackRock’s initial push, and since then, the leading cryptocurrency’s price has soared by 25.2%.
Notably, WisdomTree, Invesco, and Fidelity have also submitted similar applications. As a result, Bitcoin’s market dominance currently stands at 51.23%, surpassing the 50% mark for the first time in two years.
SEC’s Role and Future Outlook
Although the SEC has rejected previous spot BTC ETF applications, skepticism has begun to fade. Observers, including analysts at brokerage firm Bernstein, believe that the Commission is likely to approve the proposal.
They suggest that the SEC would prefer a regulated Bitcoin ETF led by mainstream Wall Street participants with surveillance from existing regulated exchanges, rather than having to rely on products like Grayscale OTC to bridge the institutional gap.
Despite recent developments, Bitcoin’s fear and greed index remains bullish, firmly positioned in the greed zone at 64. This suggests that the market sentiment surrounding Bitcoin continues to be optimistic, reflecting the ongoing influx of institutional investment.
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