The Wall Street-managed Bitcoin (BTC) exchange-traded fund (ETF) gained $506 million yesterday, February 25th, marking a remarkable day of recovery, pushing up the price of the digital currency.
This is the largest inflow into a Bitcoin ETF in the past three weeks, according to capital flow records. Fund inflows on February 2 were $561 million..
The graph below shows the flow of money into and out of Bitcoin ETFs over the past three months.
The performance was led by the iShares Bitcoin Trust ETF (IBIT), managed by BlackRock, with $297 million.
These positive developments in ETFs Pushed the price of Bitcoin to $70,000 It then returned to around $68,248 for the day, as seen in the CriptoNoticias price calculator.
The mechanism behind this increase corresponds precisely to the structure of the fund. Companies that control these products must purchase Bitcoin and hold it in their treasury to support their activities. If there is demand for these financial products, companies will have to go to the market and buy more BTC. The simple law of supply and demand causes the price of digital currencies to rise.
Impact of technology and Bitcoin spot demand
The macroeconomic environment and technology sector also brought optimism to the digital currency market. This comes after the release of quarterly results from Nvidia, the US semiconductor giant and leader in artificial intelligence (AI).
The company announced the following after Wall Street closed yesterday, Wednesday, February 25th. Record fourth quarter sales of $68.1 billion. This performance typically translates into improved sentiment across the technology sector, including Bitcoin. The sector has historically shown a correlation with the “big tech” bull cycles associated with AI.
Trends are also changing in the spot market. The first signs of a reversal come after months of supply dominating, with sales for long-term holders far outpacing new mine issuance and existing demand.
According to data provider CryptoQuant, the net demand index (which measures the market’s absorptive capacity) hit very negative lows in December and January.
In the past two days, for the first time since the end of November, The line crosses the zero axis into the positive region and a small green bar appears This indicates that the market is starting to absorb not only the daily issuance amount, but also some of the sales of past holders, as seen in the graph.
