Investments in Bitcoin exchange-traded funds (ETFs) are showing signs of recovery, signaling a return of risk appetite following a record crypto market crash in early October.
US spot Bitcoin ETFs recorded $524 million in cumulative net inflows on Tuesday, the very best each day amount since October 7, in response to data from Farside Investors.
The $524 million inflows represent the very best cumulative inflows because the crypto market crash on October 10, which significantly dented crypto investor appetite.
The positive each day inflows are a welcome signal for Bitcoin (BTC) holders, as investing in ETFs and Michael Saylor's strategy were the 2 most important drivers driving demand for Bitcoin prices this yr, in response to Ki Young Ju, founder and CEO of crypto analytics platform CryptoQuant.
Bitcoin ETF flows, US dollars (in hundreds of thousands). Source: Farside Investors
The growing demand from ETF buyers got here a day after the U.S. Senate approved a funding package that brought Congress one step closer to ending the federal government shutdown. According to a CBS News report on Tuesday, the bill now faces a full vote within the House of Representatives, which could happen later within the day.
The development resulted in a repositioning for more upside potential among the many industry's most successful traders, who’re tracked as “smart money” traders on Nansen's blockchain intelligence platform.
Smart money traders have accrued net long positions in Bitcoin value over $8.5 million within the last 24 hours, signaling growing optimism. However, in response to Nansen, smart traders are still $202 million short on the Hyperliquid decentralized exchange.
Analysts consider the correction is healthy despite retail concerns
Despite retail concerns in regards to the end of the bull cycle, Bitcoin's current correction stays in a “healthy” range, helping to reset leverage and “paving the best way for renewed institutional entry,” Lacie Zhang, research analyst at Bitget Wallet, told Cointelegraph.
“Looking forward, all eyes are on the November 13 CPI reading, although an ongoing data lag attributable to the federal government shutdown adds further uncertainty.”
Cooling inflation data could ease geopolitical concerns and result in a “liquidity-driven recovery” for the world’s largest cryptocurrency, the analyst added.
Meanwhile, continued inflows from Bitcoin ETFs could indicate that the “de-risking phase” of ETF holders is coming to an end as investor demand for digital assets returns after the crash.
Bitcoin ETFs have been largely within the red since October's crash, with each day outflows of as much as $700 million, indicating a “broader de-risking period amongst ETF investors,” crypto data platform Glassnode wrote in a post Tuesday.
Among other crypto ETFs, Ether (ETH) ETFs recorded $107 million value of outflows on Tuesday, while Solana (SOL) ETFs prolonged their 11-day winning streak with $8 million value of positive net inflows, in response to Farside Investors.
