Bitcoin ETF's fundraising ability is at its peak! Driving Bitcoin's market share in the cryptocurrency field to a new high since 2021

According to the Zhitong Finance and Economics APP, Bitcoin's absolute dominance in the cryptocurrency field has reached its strongest point in three years, reflecting the strong demand in the market for a US Bitcoin spot ETF tracking the world's largest digital asset, as well as the situation where the expectation of a Fed rate cut has diminished, leading to a period of intense volatility for smaller-scale cryptocurrencies. Statistical data shows that Bitcoin, this cryptocurrency, occupies more than half of the market value of the $2.4 trillion cryptocurrency market, largely reflecting the strong demand for the US SEC-approved Bitcoin spot ETF, as well as the sharp decline in market value of smaller tokens.

According to the latest data from CoinMarketCap, as of last weekend, Bitcoin held nearly 55% of the market value share in the $2.4 trillion cryptocurrency market, the highest level since April 2021, making 2021 a bullish year for Bitcoin. Measured by total market value, following Bitcoin in the rankings are Ethereum, stablecoin Tether, Binance Exchange's native token BNB, and Solana.

It is understood that the batch of US Bitcoin spot ETFs introduced three months ago by American asset management giants BlackRock Inc. and Fidelity Investments has accumulated assets of approximately $56 billion so far this year, making it one of the most successful inaugural products in the exchange-traded fund category.

The continuous inflow of funds from these ETFs drove Bitcoin to a record high of $73,798 in mid-March this year. However, since then, stimulated by profit-taking sentiment and a significant cooling of expectations for a Fed rate cut, the price of Bitcoin has fallen by about 6%, while an index measuring smaller-scale cryptocurrency assets has dropped by over 30%.

In recent times, the expectation of loose monetary policy in the United States in the cryptocurrency market has significantly diminished. Generally, the expectation of loose monetary policy may fuel speculative cryptocurrencies, which are mostly concentrated in smaller market cap cryptocurrenciesInstitutional Demand Strengthens

Benjamin Celermajer, head of the digital asset management company Magnet Capital, stated that institutional investors' allocation to the US Bitcoin spot ETF "has led to a very strong performance of Bitcoin relative to other crypto markets."

Both Bitcoin and the second-ranked Ethereum saw significant gains on Monday, mainly due to indications that some asset management companies will soon launch these two cryptocurrencies ETFs listed in Hong Kong. As of early Tuesday trading, Bitcoin was hovering around $63,400, down about 3%, while Ethereum was up about 1%, hovering around $3,100. Smaller cryptocurrencies such as Polygon, Cardano, and the popular Dogecoin were priced lower.

Since the beginning of last year, the Bloomberg Galaxy Crypto Index has more than doubled from the depths of the 2022 crypto bear market.

Cryptocurrency speculators are awaiting the so-called "Bitcoin halving," which will halve the new supply of Bitcoin, expected around April 20. Previous halving events have been significant tailwinds for Bitcoin prices, but given that Bitcoin prices recently reached historic highs, there is increasing skepticism about whether this scenario will repeat.

Bitcoin ETF Expected to Attract Larger Inflows

In a recent research report, the well-known Wall Street investment firm JMP Securities stated that over the next three years, spot Bitcoin (BTC) ETFs could see inflows of up to $220 billion, implying that applying a multiplier to new capital estimates could double Bitcoin prices to $280,000.

"While the inflows into spot Bitcoin ETFs have exceeded our expectations, reaching $10 billion just two months after launch," JMP Securities analysts emphasized in the report, "the current level of fund activity and flows may still be just the tip of the iceberg." They added that fund flows are expected to continue to grow significantly, as the regulatory approval of US Bitcoin spot ETFs is just the "beginning of a longer capital allocation process."

"We estimate that there could be up to $220 billion in incremental inflows into Bitcoin spot ETFs over the next three years, which could have a significant impact on Bitcoin prices considering the multiplier effect of capital," wrote JMP Securities analysts led by Devin Ryan.

Bullish sentiment on Bitcoin from Wall Street has been growing louder recently, with Standard Chartered Bank predicting Bitcoin to reach $100,000 by the end of this year, and hedge fund SkyBridge forecasting Bitcoin to reach $170,000 by April 2025In addition, as the trading price of Bitcoin once soared above $73,000, continuously setting new historical highs, venture capital in the field of cryptocurrency startups is making a full comeback. Globally, venture capitalists are re-entering the cryptocurrency field.

The latest data shows that after a "harsh" year for cryptocurrency and blockchain-related companies, the scale of venture capital investment in the industry has increased by nearly one-third compared to the previous quarter (i.e., the fourth quarter of 2023). Venture capital from around the world is beginning to refocus on the cryptocurrency market, often indicating a comprehensive warming of risk appetite in this market