Bitcoin Surges Past $100,000 on Institutional ETF Inflows

Bitcoin's price surged past the $100,000 mark in May, driven by a wave of institutional investment. Spot Bitcoin exchange-traded funds (ETFs) saw significant net inflows, totaling $142.3 million on May 7. This influx was attributed to sustained interest from institutional investors, including hedge funds and asset managers, who continue to accumulate Bitcoin through regulated financial instruments.

Leading the charge were the ARK 21Shares Bitcoin ETF (ARKB) with $54 million in inflows, followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) at $39 million, and BlackRock’s iShares Bitcoin Trust (IBIT) at $37 million. Notably, BlackRock acquired over 86 Bitcoin worth $8.4 million in a single transaction on May 7, as reported by Arkham Intelligence.

On May 8, the momentum continued with Bitcoin ETFs recording over $117 million in inflows. IBIT led with $69 million, followed by FBTC with $35 million and ARKB with $13 million. The strengthening correlation between Bitcoin and tech stocks was highlighted, with a correlation coefficient of 0.75 with the Nasdaq. This positive sentiment in the tech market supported Bitcoin's growth above $100,000.

The trend of institutional buying was evident as early as May 2, with IBIT inflows reaching $675 million. Analysts predicted that this trend would likely continue unless disrupted by significant macroeconomic or geopolitical events. The absence of substantial outflows in key ETFs, except for Grayscale Bitcoin Trust (GBTC), indicated that major investors remained bullish on Bitcoin.

GBTC outflows were noted to be driven by different factors, including high fees of approximately 1.5%, which prompted investors to seek cheaper alternatives. This shift affected Bitcoin's price and market dynamics. The outflows from GBTC were also linked to broader factors such as geopolitical tensions and political crises, which eroded investor confidence in the stability of GBTC.