Bitcoin is on course for a fifth straight month of gains, marking the token's longest winning streak since the pandemic-era bull market fueled by easy money.
The largest digital asset rose about 2% in January, but the month saw notable swings triggered by the rollout of the first U.S. spot Bitcoin exchange-traded fund and changing views on the outlook for monetary policy.
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The five-month streak of gains is the longest since the six-month period from October 2020 to March 2021, according to data compiled by Bloomberg. The token reached an all-time high of approximately $69,000 in November 2021.
Spot Bitcoin ETFs from issuers such as BlackRock and Fidelity Investments began trading in the United States on January 11th. Bitcoin soared nearly 160% last year ahead of its launch, betting that the ETF would attract new investors.
Bitcoin then fell by about 21% in the fund's first 12 days as traders monitored the fund's movements. One of the products, the $21 billion Grayscale Bitcoin Trust, was converted from a closed-end format to an ETF on January 11th. Investors have withdrawn money from the fund since the change, but the pace of withdrawals has slowed, helping the token recoup losses.
The slowdown in outflows from Grayscale funds is “significantly positive for market sentiment,” Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, said in a note Monday.
Across the 10 ETFs, a net $817 million has been raised to date, according to data compiled by Bloomberg. According to Bloomberg Intelligence, the group was the most successful ETF launch in history, measured by both trade and flow metrics.
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Investors are awaiting the Federal Reserve's interest rate decision this week, assigning near-even odds on the prospect of a rate cut in March. Any material change to this outlook could impact Bitcoin and the broader crypto market, given its sensitivity to changes in sentiment and liquidity perceptions.
Bitcoin rose about 1% to $43,500 in Singapore as of 11:53 a.m. Tuesday. Smaller tokens such as BNB and Cardano were traded in a relatively narrow mix.
© 2024 Bloomberg
