Bitcoin Cleared $65,000 This Week. Ignore the Noise, This Is the 1 Factor That Investors Need to Watch.

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By Ronald Tech

Key Points

  • The Bitcoin spot exchange-traded funds captured $181 million in net inflows on July 14.

  • Long-term holders understand that their patience and discipline are being tested right now.

  • Global capital has been chasing the AI trend, making Bitcoin an afterthought for risk-seeking investors.

  • 10 stocks we like better than Bitcoin ›

On the afternoon of July 15, Bitcoin (CRYPTO: BTC) traded above $65,000. While it didn’t remain above that level for long, it may signal the beginning of a long-awaited recovery for the coin, which hadn’t been at $65,000 in about four weeks.

Bitcoin is still 48% below its peak, and there is no shortage of commentary from so-called experts trying to figure out what variables are driving the price, ranging from favorable regulatory and industry developments to a relief bounce following a streak of bad news. Investors should simply ignore the near-term noise.

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Here’s the one factor that might matter most to Bitcoin holders right now.

Bitcoin logo on top of gold coins with candle chart in background.

Image source: Getty Images.

Focus on the exchange-traded funds

It’s been 30 months since the spot Bitcoin exchange-traded funds (ETFs) were approved by the Securities and Exchange Commission. This kicked off what was the most successful ETF launch in Wall Street history, and legitimized the asset.

Investors still closely follow ETF flows. On July 14, these products saw $181 million in net inflows. This was welcome news. The move might have been spurred by slowing inflation, which could support lower interest rates sooner rather than later.

ETF inflows matter because they signal how much fresh demand there is from various sources of capital seeking Bitcoin exposure. These investment vehicles give investors a convenient way to access digital asset price action in a regulatory-friendly manner.

Wait another month, and the ETF capital flows could tell a different story due to ongoing volatility. A notable data point to keep tabs on is the asset base of the iShares Bitcoin Trust, currently at $47 billion. This is down from a peak of around $100 billion. The decline is representative of the current bear market Bitcoin is in.

See also  <!DOCTYPE html><html lang="en"><head> <meta charset="UTF-8"> <meta name="viewport" content="width=device-width, initial-scale=1.0"> <title>Power of Investment: Insights into Financial Market Trends</title></head><body> <h2>Consumer and Business Finances: An Upbeat Outlook</h2> <p>In the vast economic landscape, customers display robust spending capacity, sparking a continuous cycle of economic vibrancy. As per a note by Deutsche Bank’s Binky Chadha on Sept. 12, both household and corporate balance sheets stand resilient, marking a departure from historical downturn patterns.</p> <p>Despite the pointed references to the historically high absolute levels of debt in various news feeds, the critical metric remains the relationship between this debt and its serviceability, a capacity that presently boasts historical strength.</p> <p>Even though surveys indicate a prevailing pessimism among consumers and business managers, the hard data underscores a different narrative - one of consistent spending patterns, possibly propelled by their sturdy financial foundations.</p> <h2>A Decoupling of the Stock Market from Political Factors</h2> <p>The conventional narrative linking Donald Trump's policy stance to favorable stock market outcomes has hit a snag. Recent observations by RBC’s Lori Calvasina, dated September 23, underscore this break in correlations.</p> <p>While the divergence may seem unusual, historical instances reveal a similar trend. Despite changes such as corporate tax reforms that initially raised tax rates, businesses managed to recalibrate their strategies, leading to sustainable earnings growth and subsequent stock price appreciation.</p> <h2>The Unyielding Power of Compound Interest</h2> <p>A revelatory insight into market behavior under different presidencies unveils a profound truth - investors who remained steadfast regardless of the political climate outperformed those who based their investment decisions on party affiliations. BlackRock’s Gargi Chaudhuri reinforces this point by emphasizing the unparalleled significance of staying invested in the market, attesting to the magnified benefits of long-term commitment.</p> <h2>U.S. Companies: A Testimony to Success</h2> <p>Borrowing an idea from Mario Draghi’s discourse on European competitiveness, Deutsche Bank’s Jim Reid sheds light on a striking dichotomy between U.S. and European enterprises. The noteworthy absence of a European firm, with a valuation exceeding €100 billion and established in the last 50 years, further accentuates the exceptional growth trajectory of U.S. corporations.</p> <p>As noted in a previous article on TKer, the U.S. market's superior performance can be attributed to various factors such as a culture of innovation, business-friendly regulations, and robust corporate governance practices.</p></body></html><html> <head> <title>Exploring Financial Trends</title> </head> <body> <header> Unveiling Financial Insights: A Look into Markets and Earnings

Capital is chasing another market trend

Investors can be confident that Bitcoin ETFs will see tremendous inflows coinciding with the next bull market. It’s just impossible to know when this could happen, although history says it’s only a matter of time. Patient investors who remain focused on the long term have always reaped the rewards from the cryptocurrency’s ascent.

Bitcoin’s path to its next all-time high won’t be easy. Global capital is chasing the hot trend, which is the artificial intelligence (AI) trade. The five major hyperscalers (Amazon, Microsoft, Alphabet, Meta Platforms, and Oracle) and the top chip sellers (Nvidia, Broadcom, Micron Technology, and Advanced Micro Devices) have a combined market capitalization of $20 trillion.

Bitcoin might be an afterthought for most investors these days.

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Neil Patel has positions in iShares Bitcoin Trust. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Bitcoin, Broadcom, Meta Platforms, Micron Technology, Microsoft, Nvidia, Oracle, and iShares Bitcoin Trust. The Motley Fool has a disclosure policy.

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