The cryptocurrency world is abuzz as Bitcoin (BTC) achieves a series of remarkable milestones. The pioneering digital currency has not only become the seventh-largest asset by market capitalization globally, surpassing oil giant Saudi Aramco, but its dominance over the crypto market has reached a new peak of 61.38%. Simultaneously, the price of Bitcoin has hit an all-time high, soaring past $93,000.
US Election Fuels Bitcoin’s Ascent
A significant portion of Bitcoin’s recent success can be attributed to the pro-crypto stance of U.S. President-elect Donald Trump during his campaign. With Republicans securing the House of Representatives, completing a political trifecta, the stage seems set for favorable cryptocurrency regulations moving forward.
According to a source close to the transition team, the incoming administration is poised to take a “pragmatic yet innovation-friendly approach” to crypto policy. This sentiment has instilled confidence in investors, fueling Bitcoin’s upward trajectory.
Record-Breaking ETF Inflows
Another key driver behind BTC’s surge is the massive influx of funds into U.S. exchange-traded funds (ETFs). Over the past six trading days alone, Bitcoin ETFs have witnessed a staggering $4.7 billion in net inflows, with Wednesday seeing an impressive $510.1 million. This brings the total since their January inception to $28.2 billion, as per Farside data.
“Bitcoin ETFs are now the primary driver of Bitcoin demand, absorbing nearly all the sell-side pressure from long-term holders. The lack of significant growth in CME open interest confirms this is a spot-driven rally,”
– Checkmate, crypto analyst
Eric Balchunas, a senior analyst at Bloomberg, noted that BlackRock’s iShare Bitcoin Trust (IBIT) continues to break trading volume records, surpassing the $5 billion mark for the first time.
Ethereum Rides the Wave
Ethereum (ETH), the second-largest cryptocurrency, is also experiencing renewed interest in U.S. spot-traded products. On November 14, ETH-based ETFs saw an additional $146.9 million inflow, bringing the total net inflows to $241.7 million, according to Farside data.
As Bitcoin maintains its dominance and Ethereum follows suit, the crypto market appears poised for further growth. With the regulatory landscape seemingly shifting in favor of digital assets, and institutional investors increasingly embracing cryptocurrencies, the future looks bright for the burgeoning asset class.
However, as with any nascent market, caution is advised. While the recent milestones are undoubtedly impressive, cryptocurrencies remain highly volatile and susceptible to rapid changes in sentiment. As always, investors should conduct thorough research and exercise due diligence before making any investment decisions.
