The cryptocurrency world went through one of the most noteworthy events as Bitcoin jumped to the $63,000 mark. This surge is attributed to previously characterized bullish sentiment within the cryptocurrency space, triggered by a supply shock mechanism, clearly indicating a wide gap between supply and demand for the world’s leading virtual asset.
In a recent X post, Mr. Matt Hougan, the Chief Investment Officer at Bitwise, revealed the extreme imbalance in Bitcoin’s supply and demand profile. The Bitcoin demand is estimated to be around 30,000, with a small supply of around 6,000 BTC. This disparity is a clear representation of a supply that is insufficient to cater for the high demand which is estimated to surpass the supply by 20.5% as depicted by the face of the current market dynamics.
Each time Hougan speaks on the issue, the theory of the gap between demand and supply seems to be stronger than ever, meaning that investors cry out and sometimes pay unimaginable amounts just to become a part of the industry. This is worsened by the escalating position of Bitcoin ETFs (Exchange-Traded Funds), which eventually drive the heightened demands even higher.
Bitcoin ETFs Propel Demand
Lately, the valuation of Bitcoin briefly passed $63K again, getting closer to the high point of this year at $68.7K. The acceleration reflects an ever-increasing urge among the traders to hop onto this high-speed train. In contrast, there was a decrease in the price of it. The value is $61,954.46, around 0.97% less than the previous day. This modified trend comes after a period of great interest that was mired with Bitcoin ETF speculation.
The ETF landscape also developed some other noteworthy changes, aside from a $139 million position liquidation from Bitcoin spot ETFs on the previous Friday, showing up the end of a seven-day influx streak, per SoSoValue data. The Grayscale GBTC ETF posted unrealized losses in a single day of $492 million, while the IBIT ETF of BlackRock managed to secure a $202 million inflow.
The net inflow for IBIT is mounting to $7.96 billion so far. However, in contrast, BlackRock’s investment into iShares Bitcoin Trust (IBIT) is much lesser than the investments made during the pre-COVID times, as BlackRock experienced a net inflow to its asset base by more than $10.5 billion in one month, which includes the latest contributions.
This week’s ongoing story reflects the play of demand and supply output, ETF flow readings, and wider economic indices, providing a fascinating insight into the intricate dance of supply and demand forces, ETF movements, and wider economic indicators. Comprising all these aspects, Bitcoin’s image becomes a painted gallery of stories, masterfully grasping the vague but thrilling course of the most adored cryptocurrency in the digital era.