Written by Matteo Greco, Research Analyst at Fineqia International, a listed digital asset and fintech investment firm.
Bitcoin (BTC) closed the week at approximately $51,725, down slightly 0.8% from the previous week’s closing price of approximately $52,150. This week was characterized by relatively low volatility, with prices remaining stable, displaying a range of approximately 4.7% between approximately $53,000 and $50,500. The highest transaction value of $52,985 was recorded on Tuesday.
The focus is on the BTC spot ETF, which continues to show strong momentum. However, following 17 consecutive days of inflow, net outflow was observed for the first time on the 21st (Wednesday). Nonetheless, the BTC spot ETF recorded inflows of approximately $585 million throughout the week, indicating continued investor interest.
Total net inflows since the ETF’s launch now stand at approximately $5.6 billion.Trading volume has continued to increase, with cumulative trading volume exceeding $50 billion since launch and currently reaching $51.6 billion, with an average daily trading volume of approximately $1.7 billion. Last week’s cumulative trading volume was about $6.3 billion, and the average daily trading volume was $1.6 billion, with only four trading days.
The increased institutional presence in the market following the approval of the BTC spot ETF is evident in the average BTC transaction size on centralized exchanges. Since launch week, average trade size has increased significantly, consistently exceeding $1,000 per trade. In particular, trading on Coinbase has seen a more notable increase compared to other exchanges, reflecting Coinbase’s popularity among institutional investors and its role as custodian of the recently launched BTC spot ETF.
The launch of ETFs also contributed to improved market liquidity. By measuring total bids and analyzing the 2% market depth requested on the BTC order book within a 2% spread of the price, we see a 23% increase in liquidity since November 2023 and a 30% increase year-over-year. This signals increased market maker activity and participation, marking the first notable uptick since the FTX collapse. The FTX bankruptcy led to the bankruptcy of Alameda, a major liquidity provider in the digital asset market at the time.
The increase in liquidity and demand is further evidenced by the total supply of stablecoins. The total stablecoin supply continued to decrease for about 18 months from May 2022 to October 2023, but began to increase again in November 2023, reaching about $139 billion from the initial level of about $124 billion. The 12% increase in total supply indicates increasing demand and liquidity in the market.
Overall, the market is showing strong resilience on a number of fronts. BTC holds prices above $50,000, altcoins like ETH are performing well with prices above $3,000, and with high demand comes increased liquidity, as evidenced by inflows into the BTC Spot ETF and surging stablecoin supply. . Additionally, with the BTC halving approaching in less than two months, the market is anticipating another important event that could impact the market.t trend.