Canada’s Purpose Bitcoin ETF raised over $38 million in bitcoin (BTC) on Tuesday, the third-largest daily flow to date.
According to data provided by Glassnode, investors have invested about 1,054 BTC in the fund, which is slightly less than the inflow received on December 6, 2021. his debut. February 22, 2021 – over 2250 bitcoins.
Purpose of Bitcoin ETF flows. Source: glassnode
Are investors buying a decline?
Bitcoin-traded funds (ETFs) mimic the behavior of the spot price of cryptocurrencies, allowing investors to access the market without directly owning bitcoins. Simply put, ETF proponents buy real bitcoin with the money they raise from an investor and thus become a proxy for measuring market interest in cryptocurrencies.
Markets generally believe that strong inflows of funds raise the prices of the underlying assets, attracting more investors in search of profit. As a result, the price of bitcoin should move in the same direction as the money flow – up – in an ideal world.
Higher currents came despite bitcoin’s recent price correction, with bitcoin trading near $37,000 on Feb. 3, almost three months after hitting an all-time high of $69,000.
Daily BTC/USD price chart. Source: Trading View
However, over the same period, the total amount of BTC held in Purpose Bitcoin ETF reserves increased from almost 24,100 to just over 31,000. This indicates that Purpose ETF investors have bought into Bitcoin’s decline.
But the story looks different when you consider all of the bitcoin money.
Thorough buildup in games
As of January 28, Bitcoin funds have seen a weekly supply of $22 million worth of BTC, according to a report published on January 31 by CoinShares. Meanwhile, its total measurements this year showed around $132 million of BTC off the market.
As such, the total assets under management of all bitcoin funds fell to their lowest point in July 2021 at $29 billion in January before returning to over $31 billion.
“We are seeing increased price sensitivity to monetary policy data with an immediate reaction to the FOMC intraday interest rate meeting,” CoinShares wrote, noting that all-digital asset funds saw inflows of $19 million in the week ending 28 January.
“Despite its small size, it still indicates that investors are beginning to cautiously add to positions at these lower price levels.”
Streaming digital assets. Source: Bloomberg, CoinShares.
Eric Balchonas and Athanasius Psarovagis, chief ETF analyst at Bloomberg Intelligence, noted that bitcoin ETFs will continue to attract inflows in 2022 as investors wait for the SEC to “get approval on the bitcoin ETF site.”
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As Bitcoin ETFs point to a cautious buildup, spot BTC is threatening to continue correcting in the coming sessions.
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In particular, the BTC/USD pair has resumed its bearish move after failing to recover $40,000 on February 1st. The correction also appeared when the price tested the descending sloping trend line as resistance, which acts as the upper trend line in the down channel.