By Matteo Greco, Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International (CSE:FNQ).
Bitcoin (BTC) concluded the week at approximately $51,725, indicating a slight 0.8% decline from the prior week’s closing price of about $52,150. The week was characterized by relatively low volatility, with prices maintaining stability between approximately $53,000 and $50,500, marking a range of around 4.7%. The peak trading value of $52,985 was recorded on Tuesday.
The focus remains on BTC Spot ETFs, which continue to demonstrate robust momentum. However, a net outflow was observed for the first-time last week on Wednesday, the 21st, following 17 consecutive days of inflows. Despite this, approximately $585 million in inflows were recorded for BTC Spot ETFs throughout the week, indicating continued investor interest.
The total net inflow since the ETFs’ launch now stands at approximately $5.6 billion.Trading volumes remained elevated, with cumulative trading volume surpassing $50 billion since launch and currently standing at $51.6 billion, with an average daily volume of about $1.7 billion. Last week’s cumulative volume reached about $6.3 billion, with a daily average volume of $1.6 billion, as there were only four days of trading.
The increased institutional presence in the market following the approval of BTC Spot ETFs is evident in the average BTC trading size on centralized exchanges. Since the launch week, the average trading size has significantly increased, consistently exceeding $1,000 per transaction. Notably, transactions on Coinbase saw a more pronounced increase compared to other exchanges, reflecting Coinbase’s popularity among institutional investors and its role as the custodian for most recently launched BTC Spot ETFs.
The ETFs’ launch also contributed to enhanced market liquidity. Analysis of the 2% market depth, which measures aggregated bids and asks on BTC order books within a 2% spread from the price, reveals a 23% increase in liquidity since November 2023 and a 30% year-on-year rise. This suggests heightened activity and participation from market makers, signaling a notable uptick for the first time following the collapse of FTX. The FTX insolvency event resulted in the bankruptcy of Alameda, a major liquidity provider in the digital assets market at the time.
Increased liquidity and demand are further evidenced by the total supply of stablecoins. After a continuous decline for about 18 months from May 2022 to October 2023, the total supply of stablecoins began to rise again from November 2023, reaching nearly $139 billion from an initial level of about $124 billion. This 12% increase in total supply indicates growing demand and liquidity in the market.
Overall, the market is exhibiting strong resilience across various aspects. BTC maintains a price above $50,000, altcoins like ETH perform well with a price exceeding $3,000, and liquidity increases alongside high demand, as seen through inflows into BTC Spot ETFs and the surge in stablecoin supply. Additionally, with the BTC halving approaching in less than two months, the market anticipates another significant event that could impact market trends.
