Bitcoin consolidates, altcoins rally as large brokerage firms join the BTC ETF party
Crypto traders continued to enjoy green charts on Thursday as altcoins stepped in to provide sources of alpha while Bitcoin’s (BTC) price consolidated above $61,000 following its roaring rally that saw the top digital asset surge 25% to a 27-month high over the span of three days.
Stocks traded mixed, but showed signs of resuming their uptrend, after the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, came in as expected, increasing 2.4% year-over-year in January, a decline from last month’s 2.6% print.
Concerns about the PCE showing an uptick in inflation weighed heavily on the markets all week, and the report coming in as expected led to some breathing a sigh of relief, as a notable increase would further reduce the likelihood of the Fed reducing interest rates anytime soon.
At the closing bell, the S&P and Nasdaq finished up 0.34% and 0.62%, respectively, while the Dow was flat.
Data provided by TradingView shows that Bitcoin spent the day oscillating around support at $62,000, hitting a high near $63,700 in the early hours before sliding to a low of $60,370 in the afternoon. At the time of writing, BTC trades at $61,550 an increase of 2.5% on the 24-hour chart.
BTC/USD Chart by TradingView
EFTs have changed the game
According to Matt Ballensweig, Head of Go Network at BitGo, this bull market has differed from previous ones as “The early innings have been decisively driven by BTC.”
“In previous bull markets, it was common to see alts move substantially higher in the early parts of the cycle; however, this time is different. Why? Because this rally is driven by real, organic net new institutional inflows,” he said. “The nine new BTC ETFs have been setting record inflows daily for the last few weeks, and the momentum continues. Over $17B is now held by these ETFs in just under 60 days of trading.”
“This goes to show that there are a plethora of new demand sources,” he added. “Trillion-dollar asset managers such as Blackrock and Fidelity are now recommending portfolios with crypto allocations – this is a huge deal as it pertains to the adoption of Bitcoin by hedge funds, RIAs, pensions and endowments, a section of the market that was relatively dormant just a few months ago.”
“If you look at some of the classic retail-traded assets like DOGE, SHIB, SOL etc, they have underperformed BTC in the last couple of weeks; however, as we get into the later stages of this bull run, expect to see a wave of retail participation to pile on,” Ballensweig said. “You’re finally starting to see DOGE/USD get bid in size, indicating retail might be joining the parade as we speak.”
Dogecoin (DOGE) is up 13.5% on the day at the time of writing, trading at $0.1274, while Shiba Inu (SHIB) has increased 19.4%, Solana (SOL) is up 18.7%, and Solana-based meme coin Bonk (BONK) has gained 58%, backing up Ballensweig suggestion that retail has indeed joined the parade.
And the rally for Bitcoin and the broader crypto market may just be getting started, as Bloomberg reports that Wells Fargo and Bank of America’s Merrill have begun offering some of their wealth management clients access to Bitcoin ETFs.
“Spot bitcoin ETFs are available for unsolicited purchases through an advisor with Wells Fargo Advisors or through our online WellsTrade platform,” a Wells Fargo spokesperson said.
This follows earlier reports that Morgan Stanley is exploring offering clients access to BTC ETFs, a development that many analysts have said would lead to a historic bull market rally as large wirehouses – such as Morgan Stanley, Merrill Lynch, and Wells Fargo – are the gatekeepers to trillions of dollars in investment funds.
“The demand, along with rapidly rising prices, are spurring firms to accelerate their activities,” said Ric Edelman, founder of Edelman Financial Services. “Every day they don’t let their advisers allocate, they get complaints from both reps and clients, which serves nobody’s best interests.”
Edelman said he expects bitcoin ETFs to ultimately see widespread availability from most registered investment advisers (RIAs) and brokerage firms.
According to Samson Mow, a prominent figure in the cryptocurrency space, a clear sign that the game has changed for Bitcoin and the crypto market is the fact that BTC is on the precipice of hitting a new all-time high before the halving, a feat that has never been achieved.
Seems like we’re going to get that new #Bitcoin ATH before the halving. It will put to rest the idea of “cycles” which can be scary for people because it means Bitcoin could just do anything at any time – which has always been the case. https://t.co/nMJG59pjVu
— Samson Mow (@Excellion) February 29, 2024
Altcoin’s rally
Bitcoin’s pause above $61,000 pushed traders into the altcoin market, resulting in the large majority of tokens in the top 200 recording gains on Thursday.
Daily cryptocurrency market performance. Source: Coin360
Bonk (BONK) led the field with an increase of 58%, followed by a 29.9% rally for Raydium (RAY), and a 27.4% gain for WAX (WAXP). Portal (PORTAL) led the losers with a decline of 42.7%, while Neutron (NTRN) lost 8.3%, and Floki (FLOKI) fell 4.5%.
The overall cryptocurrency market cap now stands at $2.31 trillion, and Bitcoin’s dominance rate is 52.9%.
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