- Bitcoin has experienced notable price swings in January, driven by new spot ETFs and monetary policy outlook. The leading cryptocurrency is poised to achieve its fifth consecutive monthly gain, marking its longest winning streak since October 2020 to March 2021.
- The debut of spot Bitcoin ETFs by BlackRock, Fidelity and others on January 11 significantly impacted Bitcoin’s performance. Following the ETFs’ debut, Bitcoin dropped around 21% over 12 days as traders monitored their performance closely.
- In addition to ETFs, investors are watching the Federal Reserve’s interest rate decision this week. Any significant changes to the outlook could impact Bitcoin and crypto markets. Overall, if Bitcoin keeps rising, it will be the fifth straight monthly gain.
Bitcoin has experienced notable price swings in January, driven by new spot ETFs and monetary policy outlook. The leading cryptocurrency is poised to achieve its fifth consecutive monthly gain, marking its longest winning streak from October 2020 to March 2021.
Launch of Spot Bitcoin ETFs Impacts Price
The debut of spot Bitcoin ETFs by BlackRock, Fidelity, and others on January 11 significantly impacted Bitcoin’s performance. Last year, Bitcoin had surged nearly 160% in anticipation of these launches. However, following the ETFs’ debut, Bitcoin dropped around 21% over 12 days as traders monitored their performance closely.
Grayscale Bitcoin Trust Transition Important
One major product, the $21 billion Grayscale Bitcoin Trust, converted from a closed-end fund into an ETF format. Initially, investors withdrew funds after the conversion. But these outflows have since slowed, enabling Bitcoin to recover some losses.
Decrease in Outflows Aids Sentiment
The decrease in outflows from Grayscale has aided sentiment, as noted by Sean Farrell of Fundstrat Global Advisors LLC. Data shows the ten new ETFs have attracted $1 billion in net inflows so far. These ETFs have had the most successful launch ever in terms of activity and flows.
Monetary Policy Outlook Also Key
In addition to ETFs, investors are watching the Federal Reserve’s interest rate decision this week. Any significant changes to the outlook could impact Bitcoin and crypto markets. Overall, if Bitcoin keeps rising, it will be the fifth straight monthly gain.
Major ETFs Attract Billions in Inflows
BlackRock’s spot Bitcoin ETF surpassed $2 billion in assets under management just two weeks after launching on Nasdaq. The iShares Bitcoin Trust (IBIT) has attracted inflows due to Bitcoin’s gains. Fidelity’s Wise Origin Bitcoin Fund (FBTC) trails with $1.8 billion in inflows over the past 10 days.
ETF Fees Influence Capital Inflows
The fees ETF issuers charge play a role in attracting capital. BlackRock set IBIT’s fee at 0.12% for the first $5 billion in assets, before increasing to 0.25%. Other issuers charge fees ranging from 0.20% to 0.25%.
