- Fed rate cuts and Trump’s win drive strong institutional demand for Bitcoin (BTC).
- BlackRock’s Bitcoin ETF saw $1.1B in inflows, leading U.S. spot ETFs post-election.
- CME futures and options show rising institutional interest amid reduced volatility levels.
Bitcoin has reached new all-time highs, driven by pivotal shifts in the U.S. financial and political landscape. Analysts attribute the rally to Donald Trump’s election victory and a 25 basis point rate cut by the Federal Reserve. These factors have also fueled significant inflows into spot Bitcoin exchange-traded funds (ETFs), with BlackRock’s IBIT leading the charge.
On November 7, BlackRock’s spot Bitcoin ETF recorded $1.1 billion in inflows. This marked a recovery after two consecutive days of outflows totaling $113.3 million. IBIT’s inflows accounted for 82% of the total $1.34 billion that flowed into U.S.-listed spot Bitcoin ETFs that day. Fidelity Wise Origin Bitcoin Fund followed with $190.9 million in inflows. The ARK 21Shares Bitcoin ETF added $17.6 million. Analysts note that these figures indicate strong institutional interest as market sentiment shifts positively.
Investors Eye Bitcoin’s Bull Run Fueled by Trump’s VictoryFed’s Rate Cut & Institutional Activity
The Federal Reserve’s recent rate cut has spurred optimism across equity and crypto markets. Investors expect further monetary easing, which has led to increased allocations to risk assets like Bitcoin. This sentiment is bolstered by speculation that the U.S. may establish a Strategic Bitcoin Reserve. Such a move would further validate the asset in institutional portfolios.
Institutional demand for Bitcoin is also evident in CME futures and options markets. Increased activity points to growing interest, particularly from U.S. investors. Additionally, implied volatility for longer-dated Bitcoin options has stabilized around 50%. This level is significantly lower than past peaks, making long-term call options more attractive.
Price Projections Remain Bullish
Many analysts are optimistic with forecasts for Bitcoin to rise to between $85,000 and $90,000 by year end. According to leading analyst, Ali Martinez, an initial rally to $78,000 will then be followed by a pullback to $71,500.
This is playing as predicted. I think #Bitcoin hits $78,000, retraces to $71,500 and then rebounds to $85,000! https://t.co/8xKUNGZYI8
— Ali (@ali_charts) November 6, 2024
From there he pushes it up to $85,000. Current forecasts by Martinez have aligned distinctly with Bitcoin’s recent price movements. Additionally, Bitcoin made a strong recovery from below $67,000 back towards current highs above $76,000.
These projections find broader sentiment support. Before the next U.S. presidential inauguration, CNBC analysts think Bitcoin could make it to six figures. On the other hand, this view is consistent with the growth of institutional participation and positive regulatory developments. This also shows that there is an increasing demand for Bitcoin as a long term investment, evidenced by the steady inflows into spot ETFS.
