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

Takeaways from the conference:

• Bitcoin has reached an all-time record high of $126,200. This is backed up by ETP flows that have surpassed the $5,67 billion mark.

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

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

BitcoinBTCThe price of soared up to $126,200, marking a record high for the digital asset. This was after one of the best weeks ever recorded in the history of crypto assets. Global exchange-traded product (ETP) net flows totalled $5.67billion, which is the highest weekly amount. This surge was a reflection of renewed investor confidence, fuelled in part by renewed trust in the “debasement trade” Fiscal and geopolitical threats are increasing.

Bitwise has a number of useful resources. weekly crypto market compass reportThe current crypto rally shows how a weakening of fiat confidence, and a rising level of macroeconomic insecurity, are driving structural demand for assets that can be used as’stores-of-value, like Bitcoin 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 debasement.

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.

The report cites onchain data that shows whale entities withdrawing over 49 000 BTC. Positive spot purchases and moderate leverage also suggest an upward trend, but not one of euphoria.

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 gains are fueled by the fiscal fragility of countries

Bitcoin enthusiast Paul Tudor Jones has echoed the growing belief that US macroeconomics is the main driver of risk assets. The federal deficit is growing and interest costs are expected to surpass $1 trillion annually. Markets have begun pricing in sustained monetary ease, historically an advantage 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. Not all signals on the blockchain support this story. 

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 a result of institutional-led growth.

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

The article is not intended to provide investment advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.