Bitcoin ETFs were the ones that put the brakes on the decline in the price of the digital currency.
Yesterday, ETFs received capital inflows of USD 103 million.
Macroeconomic data could slow down bitcoin's rise a bit.
Bitcoin (BTC) rose above $97,000 yesterday, November 27, raising hopes that it would finally reach the long-awaited $100,000. However, a pullback left the digital currency holding at $95,000.
What kept BTC from falling below that mark? The answer lies in the performance of U.S. spot bitcoin ETFs, which acted as a lifeline for the digital asset.
Yesterday, November 27, Bitcoin spot ETFs recorded a day of recovery after two consecutive days of massive capital outflows.
In total, these financial instruments managed to attract inflows of 103 million dollars, an amount that stabilized the market. This resurgence contrasted with the losses recorded on Monday and Tuesday of the same week, when investors withdrew 435 million and 122 million dollars respectively, as shown in the following graph from Soso Value.
Bitcoin ETF performance in November. Source: Soso Value.
Of the 12 ETFs listed on the US exchange, only four posted positive results on the day. The leader was the Bitwise Bitcoin ETF (BITB), which attracted $48 million in new capital inflows. It was followed by the Fidelity Wise Origin Bitcoin Fund (FBTC) with $40 million.
To a lesser extent, the Grayscale Bitcoin Mini Trust ETF (BTC) and the Franklin Bitcoin ETF (EZBC) also reported inflows of $11 million and $2 million, respectively.
A market paused for Thanksgiving
Although Bitcoin remains above $95,000, as seen on the TradingView chart, the US market was closed today, November 28, due to the Thanksgiving holiday.
For Charles Edwards, founder of the investment firm Capriole Investments, yesterday's drop was not unexpected.
On his X account (formerly Twitter), he noted that Wednesdays before the holiday are usually bullish days for bitcoin, but joked that “the turkey is killed” on Thursday, referring to the American holiday, where “bitcoin also dies a little.”
Inflation and rate cuts
At the same time, the economic context in the United States is setting the tone for the future of bitcoin.
In October, the annual inflation rate accelerated to 2.6% in October 2024, up from 2.4% in September, which was the lowest rate since February 2021, as shown in the chart below.
This reinforces expectations that the Federal Reserve (Fed) will not make a major interest rate cut in December.
In the event of an increase in interest rates, “risky” assets like bitcoin tend to be negatively affected. The reason is that Treasury bonds, considered to be one of the safest investments in the world, start to offer better returns in a high-rate environment, diverting capital from riskier markets to investments with lower risk but higher guaranteed returns.
And when will bitcoin go up?
All that said, some investors might be discouraged by the thought that Bitcoin's rally has come to an end (which, in any case, would be a small thing, considering that it has come very close to $100,000).
But most expectations are bullish for bitcoin. Next year, with Donald Trump taking office as president of the United States, economic and regulatory changes are expected that will directly and indirectly boost the price of cryptocurrencies.
According to analysts at investment firm Bernstein, Bitcoin could reach $200,000 by 2025.
So, while volatility and uncertainty may reign in the short term, as January 20 (Trump's inauguration date) approaches, BTC is likely to gain greater bullish strength. If this happens, BTC would break the psychological barrier of $100,000 and could rise to new heights.
