First Mover Americas: Bitcoin Returns to $72.5K in Muted Market Activity

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Latest Prices

CoinDesk 20 Index: 2,140.40 -0.60%

Bitcoin (BTC): $72,289.97 +0.11%

Ether (ETH): $2,631.15 -1.26%

S&P 500: 5,813.67 -0.33%

Gold: $2,778.66 -0.35%

Nikkei 225: 39,081.25 -0.5%

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Bitcoin appears to be taking a breather as October draws to a close, trading around $72,500 during the late European morning, about 0.3% higher in the last 24 hours. The broader digital asset market has fallen nearly 0.9%, as measured by the CoinDesk 20 Index, with ETH and SOL lower by 1.15% and 0.3%, respectively. Bitcoin has gained over 6% in the last week, so the temporarily muted price action may point toward profit-taking. Nevertheless, spot bitcoin ETFs registered $893 million of inflows on Wednesday, a second consecutive day of over $850 million. The strong showing was almost entirely attributable to BlackRock's IBIT, which added $872 million.

ETFs' net inflows are a sign of institutional demand as bitcoin’s dominance continues to grow, traders said. “Strong BTC net inflows indicate robust institutional demand as BTC dominance continues to rise (59.8%),” Augustine Fan, head of insights at DeFi platform SOFA, told CoinDesk. “Equities are trading with a distinctive ‘Trump-win’ flavor despite official betting odds still calling for a 50–50 race. Similar positive skews can be observed in gold and crypto prices with call skews being bid up post-election as a hedge." Skew refers to the shape of the distribution of returns for a financial asset. Positive skew in an options market context indicates that there's an increased demand for call options relative to put options. This means more investors are buying options betting on the price of the asset to go higher.

The outcome of next week's presidential election doesn't really matter in the context of mainstream bitcoin adoption through ETFs, according to Darius Sit, the chief investment officer of QCP Capital. While there may be some volatility depending on whether Donald Trump or Kamala Harris emerge victorious, the broader integration of bitcoin into American finance through firms like BlackRock is far more important, Sit said in an interview at Hong Kong Fintech Week. "When you have [BlackRock CEO] Larry Fink on CNBC talking about how bitcoin is a store of value, that's when you know crypto has become a part of the American investing narrative," he said. "BlackRock has brought crypto from frontier to mainstream."

Chart of the Day

• The chart shows the 365-day and 30-day moving averages of active bitcoin addresses.
• The two form a "golden cross" when the latter moves above the former, traditionally an indicator of upward price movement.
• The six months of sideways movement in BTC's price this year coincided with the 30-day MA falling below the 365-day MA.
• Source: CryptoQuant

- Jamie Crawley

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