By Matteo Greco, Research Analyst at the Listed Digital Assets and Fintech Investment Sector Fineqia International
Bitcoin (BTC) closed the week at around $51,725, marking a slight decline of 0.8% from the previous week’s closing price of around $52,150. The week was characterized by relatively low volatility, with prices remaining stable between approx $53,000 and $50,500, which equates to a range of approximately 4.7%. The peak trading value of $52,985 was recorded on Tuesday.
The focus remains on BTC Spot ETFs, which continue to show robust momentum. However, last week, on Wednesday the 21st, a net outflow was observed for the first time, after 17 consecutive days of inflows. Despite this, around $585 million in inflows were recorded for BTC Spot ETFs during the week, indicating continued investor interest.
Total net inflows since the launch of the ETFs now stand at approximately $5.6 billion.Trading volumes remained high, with cumulative trading volume since launch exceeding $50 billion and currently standing at $51.6 billion, with an average daily volume of approximately $1.7 billion. Last week’s cumulative volume reached approximately $6.3 billion, with a daily average volume of $1.6 billion, as there were only four trading days.
The increased institutional presence in the market following the adoption of BTC Spot ETFs is evident in BTC’s average trading size on centralized exchanges. Since launch week, the average trade size has increased significantly, consistently exceeding $1,000 per trade. Notably, transactions on Coinbase saw a more pronounced increase compared to other exchanges, reflecting Coinbase’s popularity among institutional investors and its role as custodian for the most recently launched BTC Spot ETFs.
The launch of the ETFs also contributed to greater market liquidity. 2% Market Depth analysis, which measures aggregate bids and asks on BTC order books within a 2% margin from price, reveals a 23% increase in liquidity since November 2023 and a 30% increase on annual basis. This indicates increased activity and participation from market makers, indicating for the first time a notable rebound after the FTX collapse. The insolvency of the FTX resulted in the bankruptcy of Alameda, a major liquidity provider in the digital asset market at the time.
The increased liquidity and demand are further reflected in the total supply of stablecoins. After a continuous decline for about 18 months from May 2022 to October 2023, the total supply of stablecoins started to rise again from November 2023, reaching almost $139 billion, from an initial level of about $124 billion. This 12% increase in total supply indicates growing demand and liquidity in the market.
Overall, the market is showing strong resilience in several aspects. BTC maintains a price above $50,000, altcoins like ETH perform well at a price above $3,000, and liquidity increases alongside high demand, as evidenced by inflows into BTC Spot ETFs and the surge in stablecoin supply. Furthermore, with the BTC halving approaching in less than two months, the market is anticipating another major event that could impact the market.trends.