Inflows to the spot Bitcoin ETFs have surged, but changes in investor sentiment could contribute to slowing down the rally in BTC price.
Arbitrage trading of the spot BTC ETFs and a drop in demand for inflation hedges could be limiting Bitcoin’s price upside.) has seen net inflows of $1.91 billion in its US spot exchange-traded funds . Despite this, its price has struggled to stay above $65,000.
Meanwhile, the S&P 500 index reached an all-time high on July 16, and gold, considered the world's largest reserve asset, traded at a historical high on July 17. This indicates that the factors hindering Bitcoin's performance are not tied to the traditional finance markets.
These funds engaged in arbitrage trades will eventually have to cover their futures market short positions, but the market impact is neutralized by the sale of the spot BTC position. However, this does not rule out the possibility that other savvy institutional investors are betting against Bitcoin's price.
As market confidence in the US economy grows, the narrative supporting Bitcoin as an independent means of exchange with a mathematically determined supply weakens. In the short term, positive macroeconomic data that shows no signs of stress negatively impacts Bitcoin's price. This offsets the bullish sentiment from the spot ETF inflows.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.Over 36% of Mt. Gox Bitcoin distributed to creditors, but whales keep accumulating
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