Here Is What Drives Bitcoin’s Positive Price Movements, According to VanEck
19.10.2024 17:00 2 min. read Alexander Stefanov
According to VanEck's report, Bitcoin (BTC) is poised for a potential breakout driven by 3 key reasons.
VanEck’s latest report indicates that Bitcoin (BTC) is on the brink of a significant breakout, attributed to three main factors: increasing institutional investment, miner accumulation, and flows into exchange-traded products (ETPs).
The rise in institutional adoption has strengthened the link between ETP inflows and BTC price movements. As of mid-October, U.S. BTC products experienced weekly inflows of $19.4 billion, with institutional capital playing a crucial role in influencing prices.
The findings indicate a strong correlation between ETP flows and cryptocurrency returns, reflected in an R² value of 0.3422, suggesting that institutional investments are becoming a significant driver of Bitcoin’s price. Moreover, ETP flows appear to possess some predictive capacity for post-trade performance.
Bitcoin is increasingly viewed as a “macro hedge” against economic instability, particularly among institutional investors seeking protection from inflation and market fluctuations. Additionally, U.S. miners boosted their Bitcoin holdings by 2% in September, following an 11% increase in August, showcasing their confidence in the cryptocurrency’s future value.
Market sentiment around Bitcoin has also seen improvement, with nearly 90% of addresses currently in profit and its dominance in the crypto market rising to 57%. This reinforces Bitcoin’s position as a primary store of value within the digital asset landscape.
Despite increasing regulatory scrutiny on non-Bitcoin assets, Bitcoin remains relatively insulated, solidifying its reputation as a safer investment option. The report further notes that U.S. and European traders are significantly influencing Bitcoin’s price, with demand from these regions often counterbalancing selling pressure from Asian markets.
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