Bitcoin remained bid on Thursday amid signs of continued demand for spot exchange-traded funds (ETFs).
The leading cryptocurrency traded near $72,500 on Thursday, according to CoinDesk’s market data. U.S.-listed spot ETFs pulled in another $155 million in net inflows on Wednesday, extending a recent streak of institutional buying that has helped lift prices after weeks of sluggish activity.
The fresh inflows bring total allocations to about $1.47 billion over the past two weeks, according to data curated by SoSoValue, marking a sharp turnaround after several weeks of withdrawals earlier this year.
Institutional demand through ETFs has started to stabilize after a difficult start to the year. Investors have poured about $1.7 billion into U.S. spot bitcoin ETFs since Feb. 24, according to Bloomberg Intelligence data previously reported by CoinDesk, suggesting some investors are becoming more comfortable that the market may have found at least a near-term floor.
Earlier this week, analysts at Bitfinex warned that ETF inflows do not always translate into immediate buying pressure in the spot market. Authorized participants can create and short ETF shares before picking up the underlying bitcoin, delaying the impact of these flows on price.
Still, the spot ETF inflow and bitcoin’s recent resilience amid geopolitical tensions, according to some market participants, indicate growing macro relevance of the cryptocurrency.
“Bitcoin is increasingly being priced by the market as a geopolitical hedge rather than just a risk asset,” said Livio Weng, CEO of Bitfire. “Unlike gold, bitcoin trades 24/7 and can move across borders instantly, making it a natural escape valve for capital during periods of geopolitical stress.”
On-chain data requires caution
Despite the recovery in flows, the underlying demand signals remain fragile, according to Glassnode. In a recent report, the firm said that momentum on the buy side has weakened significantly, with the 30-day moving average of realized profits down about 63% since early February.
The proportion of bitcoin supply held in excess has also fallen to around 57%, a level historically associated with early stages of deeper bear market conditions. Glassnode added that the cost basis for short-term holders near $70,000 could act as an important behavioral ceiling, potentially turning rallies into distribution zones as traders exit positions near breakeven.
