Bitcoin ETFs see $2.4B inflows as China ETFs hit record outflows

As a seasoned researcher with over two decades of experience in the global financial markets, I find myself increasingly intrigued by the dynamics at play between traditional finance and digital assets like Bitcoin (BTC). The recent events surrounding exchange-traded funds (ETFs) and the economies of major powers are a fascinating study in contrast.

This week has seen Bitcoin exchange-traded funds (ETFs) record one of their top four weeks of investment inflow, whereas China-based ETFs experienced the largest weekly outflow in history, indicating a further boost to the global acceptance of Bitcoin.

During the week of November 18th to 22nd, U.S.-listed Bitcoin (BTC) ETFs collectively attracted $2.42 billion, making it one of the top four weeks for inflows since they began trading in January, according to Dune analytics.

1 Weeks following Donald Trump’s victory in the 2024 presidential election, there has been an increase in Bitcoin ETF investments. This surge in inflows coincided with a significant price rally for Bitcoin, causing it to reach an all-time high of over 40% for the month and surpassing $99,000 for the first time.

Last week, ETFs based in China experienced their highest outflow of more than $2 billion, as reported by The Kobeissi Letter on November 22nd.

“Last week alone, China ETFs saw $2 billion of outflows, marking the largest weekly outflow in history. Despite deploying pandemic-like stimulus, recent data suggests that China’s economy is worsening.”

Historically, the value of Bitcoin tends to rise when there are economic worries or problems in the conventional financial sector, such as the failure of Silicon Valley Bank and the deliberate shutdown of Silvergate Bank.

Last year’s surge in Bitcoin’s value was likely fueled by the U.S. banking crisis that occurred in March 2023, as suggested by Arthur Hayes, the ex-CEO of BitMEX.

Bitcoin soars to $99,000 amid growing concerns over China’s economy

Over the past week, there were record withdrawals totaling $984 million from the largest China ETF, iShares China Large-Cap ETF (FXI). This represents the fifth straight week where investors have taken their money out, indicating continuous outflows.

Despite China’s government implementing economic stimulus strategies to alleviate investors’ worries about a possible economic downturn, the significant outflows of capital persist, as suggested by the Kobeissi Letter.

“Even as hundreds of billions of dollars of stimulus have begun, Chinese consumer sentiment is terrible. Over the last 3 years, consumer confidence in China is down ~ 50 points. Such a drop in consumer assessment of the Chinese economy has almost never been seen before.”

Bitcoin price soars to $99,800 amid growing ETF inflows

In the very same week, the value of Bitcoin kept surging, while Bitcoin ETFs managed to exceed $100 billion in total assets for the first time.

The cost of a single Bitcoin reached an unprecedented peak of $99,800 on November 22nd, marking a 9.5% increase in the last week. Conversely, China’s FXI index dropped by more than 3%. In the longer term, Bitcoin has gained approximately 48%, whereas the FXI has experienced a decline of over 7%, as depicted by data from TradingView.

Some believe that the record monthly $9.7 billion inflow of stablecoins into exchanges could drive Bitcoin‘s price above $100,000 by the end of November. However, there are also those who worry about the longevity of this current market rally.

Significantly, Kris Marszalek, the co-founder and head of Crypto.com, had earlier expressed a viewpoint suggesting that the cryptocurrency market may require reduction in debt (or deleveraging) before Bitcoin can reach a price point of $100,000.

2024-11-23 16:38

Bitcoin soars to $99,000 amid growing concerns over China’s economy

Bitcoin price soars to $99,800 amid growing ETF inflows

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