Bitcoin (BTC) exchange-traded funds (ETFs) experienced outstanding performance over the past five days.
In this short period, ETFs accumulated capital inflows totaling $2 billion, triggering a historic rise in the price of the underlying asset, taking it to over $100,000.
The following graph shows the behavior of BTC in the last week:
The protagonist of this trend was the iShares Bitcoin Trust (IBIT), managed by BlackRock. This fund registered income of 1.74 billion dollars in just five days.
Furthermore, on December 2, IBIT reached a new milestone by exceeding half a million bitcoins in custody, consolidating itself as the largest and most valuable bitcoin ETF on the United States Stock Exchange. Currently, this fund manages 50,000 million of dollars in assets.
According to commented Eric BalchunasETF specialist, It took IBIT just 228 days to reach $50 billion in assets under management. This achievement makes it the fastest fund to reach this figure, far surpassing the iShares Core MSCI EAFE ETF (IEFA), which needed 1,329 days to reach a similar amount.
The success of IBIT was accompanied, although to a lesser extent, by other funds. The Fidelity Wise Origin Bitcoin Fund (FBTC) obtained capital inflows of 241 million dollars in the same period.
Meanwhile, funds like the VanEck Bitcoin ETF (HODL) saw more moderate movements, with inflows of $33 million and $16 million between Nov. 29 and Dec. 3. The good performance of the ETFs can be seen in the following graph from Soso Value.
Why do ETFs impact the price of bitcoin?
The operation of spot bitcoin ETFs explains their direct impact on the price of the digital currency. These funds require acquiring and holding bitcoin in their reserves to back their actions, which generates tangible demand in the market.
As investment in these ETFs increases, managers must buy more bitcoin to maintain support, which reduces the number of coins available on the open market.
This imbalance between supply and demand significantly contributes to the rise in the price of bitcoinas was evident in recent days.
Political factors drive optimism
Donald Trump’s recent victory in the United States presidential elections has generated an atmosphere of optimism among cryptocurrency enthusiasts.
Trump has promised to implement favorable policies for the sector, including the creation of a Bitcoin Strategic Reserve and the elimination of capital gains taxes for cryptocurrencies issued by US companies.
Additionally, his administration’s key nominees, such as Scott Bessent for Secretary of the Treasury and Howard Lutnick for Secretary of Commerce, are figures recognized for their affinity toward innovation in digital assets. These political signals have reinforced expectations of a more favorable environment for cryptocurrencieswhich could continue to drive its adoption and value in the coming months.
The combination of extraordinary ETF performance and expectations of pro-crypto government policies has taken bitcoin to a new all-time high. With a more optimistic market and growing institutional demand, the future of bitcoin looks brighter than ever.
