- Gold’s pain “is like the cherry on top for Bitcoin fans,” Balchunas says, amid euphoria following BTC ETF launches.
- Bitcoin price has nicked $53,000, a level last tested on December 3, 2021.
- Almost $100 million in shorts have been liquidated in the process alongside nearly $12 million in long positions.
In a landmark decision on January 10, the US Securities & Exchange Commission (SEC) approved multiple spot Bitcoin exchange-traded funds (ETFs) in a single go. Almost seven weeks down the line, the theme continues to drive the cryptocurrency market, giving investors the train to ride on as markets prepare for the BTC halving in 52 days.
Also Read: Bitcoin price's next move should manifest once MicroStrategy grows BTC portfolio to 193K tokens
Bitcoin ETF AUM to surpass Gold
Eric Balchunas, an ETF specialist with Bloomberg Intelligence, says that there is a decent chance that the assets under management (AUM) for Bitcoin ETFs could surpass those of Gold ETFs in less than two years.
Gold's Pain is Bitcoin ETFs' Gain in Store of Value Smackdown.. new from me on how gold being in the gutter is like the cherry on top for bitcoin fans who just got to witness the biggest ETF launch ever. Decent chance bitcoin ETFs pass gold ETFs in aum in less than 2yrs w… pic.twitter.com/rXJra1dyhF
— Eric Balchunas (@EricBalchunas) February 26, 2024
This supposition draws from the current lull in the Gold ETF market. According to Balchunas, declines in the price and interest in Gold ETFs is what has come as markets lean toward BTC ETFs. In his opinion, we now have a battle for assets between the two investment products.
It becomes even sweeter as BTC ETFs have managed to amass over $8 billion, according to Balchunas, adding that “[BTC ETFs now command] 40% as much in assets and could surpass Gold in under 24 months.”
JUST IN: #Bitcoin is demonetising Gold ETFs as the 'Store of Value' narratives takes hold.
— Bitcoin Archive (@BTC_Archive) February 26, 2024
Bitcoin ETFs are taking in billions, while Gold ETFs are bleeding assets.
Bloomberg's @EricBalchunas pic.twitter.com/k4SuvcTN22
Evaluating how Bitcoin ETFs continue to haul in cash as investors bail on Gold, Balchunas details that as BTC ETFs took in about $5 billion in net new assets since they started trading on January 11, Gold ETFs have only managed $3.6 billion in outflows with part of it going to the BTC ETFs.
Balchunas deems Bitcoin ETF class “the most successful launch in history by many measures,” acknowledging that they have added competition for Gold. A response by X user @wschweitzer corroborates this conclusion.
I'm old and before Bitcoin was a buyer of Gold and Silver which I still own. When I discovered $BTC I stopped buying Gold and Silver. I think both can exist in a portfolio.
— Walter Schweitzer (@wschweitzer) February 26, 2024
Almost $100 million in short positions liquidated as Bitcoin price breaches $53,000
Bitcoin price has breached the $54,000 milestone, a level last tested on December 3, 2021. The multi-year high has caught many traders off guard as analysts anticipate a correction before the next leg up.
BTC/USDT 1-day chart
Data shows that there are many stop losses around $52,000, which is likely to trigger a foray north in Bitcoin price as shorts close their positions.
#BTC Liquidation Update
— Dieguito - Charts (@DieguitoCharts) February 26, 2024
52k's are full of stops, which can be fuel for higher
I am still LONG from low 50k's, and holding spot position on altcoins also ✅ pic.twitter.com/dTS3Fc2KdM
Nevertheless, with the foray past $54,000, $96.36 million in short positions have been liquidated alongside $11.5 million longs.
BTC liquidations chart
At the time of writing, Bitcoin price is trading at $54,382 as of 21:00 GMT.
Open Interest, funding rate FAQs
How does Open Interest affect cryptocurrency prices?
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
How does Funding rate affect cryptocurrency prices?
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Could Worldcoin price shoot up 45% ahead of OpenAI’s live stream on Monday?
Worldcoin has formed a double bottom around a key support level, suggesting a potential accumulation. If the OpenAI’s Monday live stream has a positive impact on Artificial Intelligence field, it could positively impact WLD and other AI-based tokens.
Here’s what needs to happen for The Graph price to revisit $0.422
The Graph price trades inside the $0.192 to $0.494 range. Investors need to wait for GRT to overcome $0.343 before being bullish on GRT. If successful, GRT could rally 50% and revisit the $0.422 hurdle. A decisive daily candlestick close below $0.192 will invalidate the bullish thesis.
SingularityNET price could bounce 30% if AGIX can hold this level
SingularityNET price has been consolidating around the bottom of the $0.903 to $1.475 range for nearly a month. With some AI-tokens showing signs of revival, AGIX needs to be enalyzed for potential breakout opportunities like Arkham (ARKM).
Arkham price primed for a recovery rally ahead of OpenAI’s announcement
Arkham price eyes a potential reversal as it clears key hurdles. ARKM likely to rally 27% if it can overcome $2.74 resistance level. A breakdown of $2.28 wil invalidate the bullish thesis for the AI-based token.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped. Markets have noted significant trading differences between sessions, and while the Asian market showed strength, whatever ground they were able to cover was oftentimes wiped out by traders in the US.