The Impact of Recent Developments on Bitcoin Prices

Key Takeaways

• The second-largest daily inflows into spot bitcoin ETFs could not sustain bitcoin prices above $70,000. Analysts say hedge funds and commodities traders are engaging in price arbitrage by buying ETFs and selling CME bitcoin futures.
• Robinhood announced an agreement to purchase crypto exchange Bitstamp.
• Semler Scientific is taking a page out of the Microstrategy playbook and acquiring bitcoin.
• Market watchers will be watching out for CPI data and Fed chair Jerome Powell’s remarks for cues on when the central bank may cut rates.

Bitcoin prices remained fairly rangebound last week, though they fell sharply below the $70,000 mark on Friday, after climbing to more than $71,000 earlier in the week. The second-largest daily inflows into spot bitcoin exchange-traded funds could not keep the bitcoin price momentum going as traders engaged in arbitrage to make money off the difference between spot and futures prices. Robinhood grabbed headlines with its acquisition of Bitstamp in a bid to expand its overseas business. Additionally, another publicly traded company has decided to take advantage of bitcoin as a treasury asset.

Bitcoin ETFs See Second-Strongest Daily Flows

Last Tuesday, U.S. spot bitcoin ETFs saw their second-highest daily net inflows, reaching $886.6 million, according to data from Farside Investors. Leading the inflows was Fidelity’s Wise Origin Bitcoin Fund, contributing $378.7 million, followed by BlackRock’s iShares Bitcoin Trust with $274.4 million.

This influx marked sixteen consecutive days of net inflows for these ETFs, which has since been extended to nineteen days. It was a strong week overall for bitcoin ETF inflows, as nearly $1.6 billion of flows came into the market from Tuesday to Thursday alone. The cumulative net inflows for U.S. Bitcoin ETFs have now reached $15.6 billion, with IBIT overtaking Grayscale Bitcoin Trust as the largest player in the market. Despite the strong inflows, bitcoin’s price has only flirted with a new all-time high and not yet hit the $73,000 mark seen in March.

Traders were bullish on spot bitcoin ETFs as they began trading in January, with inflows powering a rally in bitcoin prices. However, that trend may be changing as traders are now betting on arbitrage.

Hedge funds and commodity traders are buying spot bitcoin ETFs while selling CME futures, or basis trading, aiming to profit from the futures market premium relative to spot prices, according to BitMEX Research.

What Bitstamp Buy Means For Robinhood

Robinhood’s $200 million acquisition of crypto exchange Bitstamp accelerates its foray into digital assets, especially outside the U.S. This expansion comes roughly six months after Robinhood began offering crypto trading to clients in the European Union.

Bitstamp holds 50 active licenses and registrations worldwide, positioning Robinhood to compete directly with industry leaders like Binance and Coinbase. Bitstamp’s extensive spot exchange, widely used in Europe and Asia, offers over 85 tradable assets, including staking and lending services, and is intended to drive the growth of Robinhood Crypto as its first institutional business.

“The acquisition of Bitstamp is a major step in growing our crypto business,” said Robinhood Crypto General Manager Johann Kerbrat. “Bitstamp’s highly trusted and long-standing global exchange has shown resilience through market cycles.”

While this deal is set to close in the first half of next year, Robinhood’s crypto business is thriving—driving roughly a fifth of the company’s first-quarter net revenue—despite regulatory challenges in the U.S.

Semler Scientific Follows Microstrategy’s Bitcoin Playbook

Semler Scientific announced last Thursday that it will bolster its existing bitcoin holdings with a recent $17 million purchase while also planning to raise $150 million. In May, the healthcare company announced a $40 million bitcoin acquisition, which subsequently boosted its stock by roughly 25%. The company now possesses 828 bitcoins in total.

Semler Scientific has strategically diversified by incorporating bitcoin into its corporate strategy. CEO Doug Murphy-Chutorian stated, “Semler remains focused on our dual strategies of expanding our healthcare business and acquiring and holding bitcoin.”

Semler’s recent announcement aligns with the broader trend of publicly traded companies holding significant amounts of bitcoin, collectively totaling 308,688 BTC worth around $21.4 billion, according to Bitcoin Treasuries. Microstrategy is the most notable example here, holding nearly $15 billion worth of bitcoin, but others include Tesla and Block.

Semler’s stock jumped in the immediate aftermath of the announcement and is trading roughly 27% higher compared to the close last Thursday. Microstrategy stock has more than doubled since the start of the year as its bitcoin portfolio has benefited from rising bitcoin prices.

What to Expect in the Markets This Week

Market watchers, across traditional finance and cryptocurrency markets, will be keeping a close eye on the Consumer Price Index (CPI) data and Federal Reserve Chair Jerome Powell’s press conference on Wednesday for cues on when the central bank could move towards cutting interest rates.

Hotter-than-expected inflation data in the past has led to a decline in bitcoin prices as it creates uncertainty about when the Fed will lower rates and by how much.

The Fed’s anti-inflation campaign of raising interest rates has pushed bond yields higher, which makes them more attractive for investors—not only for the returns but also because bonds tend to carry less risk.

Outside of bitcoin, meme-based tokens on Solana, especially those backed by various celebrities, are continuing to attract attention from investors who prefer to gamble on small-cap crypto assets. In particular, MOTHER, which has the backing of Australian recording artist Iggy Azalea, rose from below $0.01 to above $0.20 over the past couple of weeks, which means its market cap is nearly $200 million.

Overall, recent developments in the cryptocurrency market have had a significant impact on bitcoin prices and investor sentiment. As companies continue to embrace digital assets and regulatory landscapes evolve, the future of cryptocurrencies remains dynamic and full of potential.