- Bitcoin sparks optimism as it records new highs after two years.
- BTC ETF becomes a favorable asset on the Wall Street.
Bitcoin’s [BTC] price hit $50,000, reaching its highest level in over two years. Meanwhile, U.S. tech company MicroStrategy surged nearly 11% on the 12th of February mirroring the king coin’s hike. The company is known for its support for Bitcoin and holds about 190,000 BTC worth around $8 billion
According to Michael Saylor, Co-Founder of MicroStrategy, this milestone is a testament to Bitcoin’s growing popularity as the most sought-after digital asset. During a CNBC TV interview, Saylor highlighted Bitcoin’s unique appeal,
“It’s novel, it’s digital, it’s global, it’s unique, and it’s uncorrelated to traditional risk assets because it doesn’t come with exposure to any given country, current company, quarterly result, product cycle, competitor not to weather not to war not to an employee base or supply chain.”
This independence from conventional market influences makes Bitcoin an attractive addition to investment portfolios.
Pent-up demand for Bitcoin
Saylor emphasized that there has been a decade of accumulated demand for BTC exchange-traded funds (ETFs). This anticipation has now been met, allowing mainstream investors access to Bitcoin.
He elaborated that initially, there was a period of rebalancing, during which investors shifted their capital among futures markets, miners, MicroStrategy, and ETFs.
After this rebalancing phase, the assets stabilized, and investors started to recognize that the demand for Bitcoin via these ETFs is tenfold higher than the supply provided by natural sellers, primarily miners.
Wall Street loves Bitcoin
In another CNBC TV interview, Anthony Pompliano, founder of Pomp Investments, highlighted the unprecedented achievement of ETFs. He pointed out that in the entire history of over 5,500 ETF launches, no fund has ever reached $3 billion in assets under management (AUM) within the first 30 days.
Yet, both BlackRock and Fidelity achieved this milestone, marking a historic first.
He stated,
“The verdict is in: Wall Street doesn’t just like Bitcoin. They love Bitcoin.”
Pompliano highlighted the remarkable daily net inflows of $500 million into these funds. However, he contrasted this with the daily incoming supply of Bitcoin, which is only 900 BTC, equating to approximately $40 to $45 million.
This discrepancy indicates a demand for the king coin that is 12.5 times greater than the daily production rate.
Impact of ETF on Bitcoin demand
When asked about the impact of ETFs on this demand, Pompliano suggested that there is way more buying pressure. This is evidenced by BlackRock’s $4 billion inflows and Fidelity’s $3.5 billion. Moreover, both Bitwise and 21Shares are expected to reach around $1 billion in inflows soon.
Interestingly, 80% of all BTC in circulation has not moved in the last six months, as per the exec, and only about $200 billion is actively tradable. ETFs have absorbed 5% of the entire tradable supply of Bitcoin in just 30 days, making it Wall Street’s favorite asset.
Reflecting on the future trajectory of BTC’s value, Pompliano shared that the significant demand, along with the upcoming halving event, almost guarantees a return to Bitcoin’s all-time high (ATH) prices within the next year.
