Bitcoin’s dominance of the crypto sector is at a three-year high, reflecting robust demand for US exchange-traded funds holding the largest digital asset as well as a rocky period for smaller tokens.
The batch of three-month-old US spot ETFs from issuers including BlackRock Inc. and Fidelity Investments have amassed about $56 billion in assets to date, ranking as one of the most successful debuts ever for a fund category.
Institutional Demand
Allocations to the US ETFs by institutional investors have “resulted in Bitcoin performing very strongly relative to the rest of the market,” said Benjamin Celermajer, director at digital-asset investment manager Magnet Capital.
Bitcoin and second-ranked Ether jumped on Monday, boosted by indications that asset managers will soon launch Hong Kong-listed ETFs for both tokens. Bitcoin rose 4.3% to $66,575 as of 11:50 a.m. in London, while Ether added 6.2% to reach $3,260. The rallies spurred broader climbs, lifting the likes of Polygon, Cardano and meme-crown favorite Dogecoin.
The Bloomberg Galaxy Crypto Index has more than tripled since the start of last year in a rebound from a deep bear market in 2022.
Crypto speculators are awaiting the so-called Bitcoin halving, which will reduce new supply of the token in half and is expected around April 20. Previous halvings were a tailwind for prices, though there are growing doubts about whether a repeat is likely given Bitcoin recently hit a historical peak.
First Published: Apr 15 2024 | 5:19 PM IST
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