Bitcoin rally has ‘room to run’ after $50K push: Strategist

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Bit­coin (BTC-USD) has hit over $50,000 for the first time since late 2021, con­tin­u­ing the recent cryp­to ral­lies and see­ing gains of over 17% in the past month. With many inflows attrib­uted to the recent approval of spot bit­coin ETF offer­ings, can bit­coin main­tain this run?

Fund­strat Glob­al Advi­sors Head of Dig­i­tal Asset Strat­e­gy Sean Far­rell and Swan Bit­coin Head of Swan Busi­ness Dante Cook join Yahoo Finance to dis­cuss bit­coin ETF inflows and give insight into bit­coin’s future.

Cook puts the ral­ly into con­text:
“There are a lot of oth­er fac­tors out­side of just the ETF inflows, although that is a mas­sive rea­son why… you’re see­ing a lot of this price action because these ETF launch­es have been his­toric,” Cook says, putting the ral­ly into con­text. “FBTC, Fideli­ty’s prod­uct [and] IBIT, Black­share’s prod­uct are num­ber one and two the most suc­cess­ful ETF launch­es of all time. Just like the Chiefs and Patrick Mahomes won back to back cham­pi­onships, these last two weeks you’ve seen back-to-back his­toric lev­els of inflows in dol­lars mov­ing into this asset class.”

For more expert insight and the lat­est mar­ket action, click here to watch this full episode of Yahoo Finance Live.

Edi­tor’s note: This arti­cle was writ­ten by Nicholas Jacobi­no

Video Transcript

- It’s been one month since the SEC’s approval of Spot Bit­coin ETFs. Since launch­ing, funds have pulled in near­ly $3 bil­lion in inflows accord­ing to Coin­Shares. Today, Bit­coin prices briefly topped $50,000 boost­ed in part by Spot Bit­coin ETF inflows. Join­ing us now for the lat­est pulse on all things cryp­to is Dante Cook, Swan Bit­coin Head of Swan Busi­ness along with Sean Far­rell, Fund­strat Glob­al Advi­sors Head of Dig­i­tal Asset Strat­e­gy. Guys, wel­come both of you to the program.

And Sean, maybe I’ll start with you. It has been, Sean, about a month since the SEC did approve these new Spot Bit­coin ETFs. What have we learned so far, Sean? Grant­ed ear­ly days, but what have we learned so far about demand for these new products?

SEAN FARRELL: Well, we have learned that bring­ing Black­Rock into the equa­tion is sig­nif­i­cant. We’ve learned that there is demand for these prod­ucts. And we’ve also learned that peo­ple gen­er­al­ly like low cost liq­uid prod­ucts over oth­er prod­ucts that might be more expen­sive and not track the under­ly­ing asset as effectively.

- Dante, is this indeed the rea­son that we have seen Bit­coin ral­ly­ing like it has been or are there oth­er fac­tors going on that peo­ple should know about?

DANTE COOK: Well, there are a lot of oth­er fac­tors out­side of just the ETF inflows. Although that is a mas­sive rea­son why you’re see­ing a lot of this price action. Because these ETF launch­es have been his­toric. There have been over 5,000 ETFs launched over the last 30 years. And FBTC, Fideli­ty’s Prod­uct ibbett Black shares prod­uct are num­ber one and num­ber two of the most suc­cess­ful ETF launch­es of all time.

And so just like the Chiefs and Patrick Mahomes won back to back cham­pi­onships, I mean, these last two weeks, you’ve seen back to back his­toric lev­els of inflows and dol­lars mov­ing into this asset class. And when you attach that to things like the Bit­coin halv­ing where the sup­ply of over­all Bit­coin will get cut in half right around April, I mean, you’re see­ing a mas­sive inflow of demand, insti­tu­tion­al and retail, hit­ting a sup­ply shock.

So I think there’s a lot of dif­fer­ent fac­tors there.

- And Sean, I’m curi­ous, Bit­coin jump­ing to 50,000 first time in more than two years. Sean, where do you think the price heads from here, at least in the near to inter­me­di­ate term? What are the puts and takes we need to consider?

SEAN FARRELL: Yeah. Look. So we start– our analy­sis is based– we always start with macro. And we saw some poten­tial tur­bu­lence head­ing into the year, thought we were head­ing high­er, our price tar­get for the year was $125. Cer­tain­ly not in a straight line. But a lot of that tur­bu­lence in our view was going to stem from a repric­ing of the tim­ing and fre­quen­cy of any poten­tial Fed rate cuts as well as poten­tial upward pres­sure on the long end of the curve due to any poten­tial increase coupon issuance from the Treasury.

And if we look at what has hap­pened over the past sev­er­al weeks from right before the ETF launch up through today, we’ve with­stood a pret­ty con­stant bar­rage of neg­a­tive macro vari­ables. We’ve had a pret­ty mas­sive ral­ly in the dol­lar. We’ve priced out most of the exces­sive rate cuts that I just men­tioned that I just allud­ed to. And we also had some move­ment– upwards move­ment at the long end of the curve.

So all that con­sid­ered, it paints a pret­ty con­struc­tive pic­ture that hav­ing just gone through that, being a $50,000, that gives me some con­fi­dence that this ral­ly in the near term cer­tain­ly has some room to run.

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