Bitcoin ETFs account for about 75% of new investments

It is estimated that three-quarters of new investment in Bitcoin came from ETFs, driven by Bitcoin breaking through the $50,000 mark.

An estimated 75% of new Bitcoin investment comes from the 10 Bitcoin spot exchange-traded funds (ETFs) approved in the United States on January 11, 2022.

According to a report published on Feb. 14 by on-chain data analysis firm CryptoQuant, over the past two weeks, more than three-quarters of new Bitcoin investment came from Bitcoin spot ETFs, excluding Grayscale’s Bitcoin Trust (GBTC) ETF.

“We estimate that over 75% of new investment has come from these ETFs. Furthermore, investment from these ETFs has increased to 2% of total historical investment in Bitcoin, as measured by realized market capitalization, in just one month,” the report said.

As of 10:45 a.m. on Feb. 15, the price of Bitcoin was up 1.8% at $52,354. Bitcoin reached a two-year high of $51,000 on Feb. 14, pushing its market capitalization above $1 trillion for the first time since November 2021.

BTC/USD, 7-day chart. Source: CoinMarketCap

According to a Feb. 14 tweet from CryptoQuant lead researcher Julio Moreno, demand for ETFs is a major driver of Bitcoin’s price surge:

“Bitcoin’s move above $50,000 was driven by new demand for ETFs.”

According to Farside Investors, Bitcoin spot ETFs have accumulated a total of 4,115 Bitcoins, worth approximately $21.5 million. At the time of writing, BlackRock’s iShares Bitcoin Trust ETF has accounted for the majority of inflows, holding a total of 4,843 Bitcoins, worth approximately $253 million.

Spot Bitcoin ETF flows. Source: farside.co.uk

CryptoQuant Research predicts that a breakout above $56,000 will be the next important price level for Bitcoin:

“From a network valuation perspective, Bitcoin’s next target is $56,000. Valuation indicators do not indicate significant downside risk.

James Wo, founder and CEO of crypto investment firm DFG, said that ETF inflows are the main reason why Bitcoin reached $52,000. He told Cointelegraph: "The total value of all spot Bitcoin ETF products has now exceeded $10 billion, and BlackRock's Bitcoin ETF purchases 12 times the mining volume every day, which means that the crypto ecosystem has entered a new era of institutional asset allocation through spot Bitcoin ETFs."

However, according to a Feb. 14 tweet from on-chain analyst Cole Garner, Bitcoin is facing significant resistance around $52,000 until $52,300 due to a “buy wall” on Bitfinex.