BTC is the global leader in crypto with record-breaking ETP flows

Takeaways from the conference:

• Bitcoin hit a new record of $126.200. The inflows into exchange-traded funds (ETPs) reached $5.67 Billion, which is an ETP investment volume record.

• The uncertainty in the fiscal and geopolitical spheres has re-emerged. “debasement trade” narrative.

• Retail participation is declining while institutional inflows continue to dominate.

BitcoinBTC, which is the most popular crypto-based exchange traded product, reached a new record of $126,200 Monday. It was the result of one of digital assets’ strongest ever weeks, as the global ETPs logged the highest weekly inflows in history, $5.67 Billion. Investor confidence returned, fueled by renewed belief in the “debasement trade” As fiscal and geopolitical risk mount.

Bitwise has a number of useful resources. weekly crypto market compass reportThe crypto rally of the moment highlights how macroeconomic uncertainties and weakening confidence in fiat currencies are driving demand for value-store assets such as Bitcoins and gold.

Director and Head of Research André Dragosch, Senior Research Associate Max Shannon, and Research Analyst Ayush Tripathi highlighted that the US Dollar Index (DXY) has fallen 10% year-to-date, while gold has surged 50%, outpacing Bitcoin’s 27% gain over the same period. BTC is seen by many as an asymmetrical digital hedge in the fight against currency devaluation.

Bitwise reported that exchange-traded fund (ETF) products for spot Bitcoin led with $3.49billion. Ethereum came in second at $1.49billion and altcoins other than Ethereum received $685m. US-based spot ETFs dominated the activity. BlackRock’s iShares Bitcoin Trust(IBIT) as well Bitwise’s BITB attracted most of the new allocations.

Onchain data, cited by the report, revealed that whale entities had withdrawn over 49,000 BTC from exchanges, while spot-buying and moderate leverage indicate a sustained, not euphoric advance.

Dragosch, Bitwise and their team have concluded that Q4 is expected to be historically strong and will see a rise in liquidity.  

“Investors positioned on either side of the store-of-value debate could ultimately converge toward the same outcome, renewed capital inflows into digital assets.”

Related: Bitcoin trader calls $124K ‘pivotal’ as BTC retraces from new all-time high

Bitcoin’s price rise is fueled by fiscal fragility

Bitcoin proponent Paul Tudor Jones shared a view increasingly held that US risk assets are now primarily driven by the US fiscal environment. As the federal budget deficit grows and annual interest rates are set to reach $1 trillion, market participants increasingly price in monetary easing. This has historically been a positive for BTC.

Cointelegraph reported As foreign investors retreat from US Treasurys as the dollar falls, there is a capital flow toward “hard assets” Bitcoin may accelerate. Tudor compares the current bull market to that of the 1990s, stating the fact that, while the valuations are stretched, there is still room for the rally to continue.

Fiscal fragility, policy expectations that are dovish, and declining real returns all combine to produce an environment conducive for Bitcoin’s structural growth. Onchain signals do not always support this narrative. 

Bitcoin researcher Axel Adler Jr. pointed It is worth noting that the small transactions, which are typically driven by retailers, have been declining steadily since spring 2024. This has happened even though Bitcoin has reached new heights.

The divergence in price and retail participation suggests that Bitcoin’s current bullish momentum is largely driven by institutions. This may indicate retail fatigue.

Related: US Bitcoin ETFs post 2nd-highest inflows since launch on crypto rally

This article contains no investment recommendations or advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making their final choice.