If you thought Bitcoin ETF related affairs could not get any better, then you are in for a pleasant surprise. Recent reports revealed that Bitwise is at the helm of the next major ETF-related development.
The scope of institutional demand is on the verge of expanding thanks to Bitwise. The latter has reportedly filed for a new ETF but this one is different unlike the previous ones approved earlier this year.
Bitwise reportedly filed for a Bitcoin standard company or corporation ETF. This type of exchange traded fund will make it possible to invest in companies that hold Bitcoin reserves.
Bitwise files for Bitcoin Standard Corporations ETF…
Would own stocks of companies that have adopted the “bitcoin standard”, which they define as holding at least 1,000 btc in corporate treasury.
The btc treasury operations virus is spreading. pic.twitter.com/me0XXX9a6g
— Nate Geraci (@NateGeraci) December 26, 2024
The new ETF filing highlights the level of interest in the cryptocurrency as a rapidly growing asset class. Bitwise aims to use the Bitcoin standard company ETF as a tool to provide investors with more exposure to the asset.
The new ETF eligibility criteria was also revealed. Companies must own at least 1,000 BTC and have a minimum marketcap of $100 million. In addition, 10% of their stock at most should be privately held.
The return of institutional demand for Bitcoin?
Institutional demand for Bitcoin through ETFs was strong in the first half of December. However, that change as of 19 December after Bitcoin ETF flows turned negative up until 26 December.
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ETFs absorbed roughly 475.2 million BTC during Boxing day, possibly indicating that the festive selloff could be over. This indicate that institutional investors still perceive Bitcoin as undervalued below $100,000.
Demand may set Bitcoin up for an interesting few months ahead especially with the Bitwise ETF filing. It will likely pave way for more institutional liquidity.
It was also noteworthy that the recent Bitcoin ETF outflows were in line with exchange reserve data. Roughly 33,000 BTC flowed onto exchanges between 18 and 25 December.
Roughly 6,000 BTC has since exited exchanges, suggesting some accumulation has recently taken place. However, Bitcoin price action indicates that price is currently in a short term support level.
Can Bitcoin shrug off the sell pressure?
Lack of strong demand could lead to capitulation, in which case price could dip to the $85,000 price range. Potentially even lower, especially as bullish expectations remain high for 2025.
Bitcoin’s $94,125 press time price tag represented a 143% premium from its lowest price tag in 2024. Roughly 86% of Bitcoin holders were in profit at this price tag. This level of profitability, with relatively low sell pressure suggests that investors remained optimistic about their prospects in 2025.
On the other hand, this also underscores potential for a massive selloff event. A significant and unexpected pullback could thus be on the cards in case of weak demand especially if Bitcoin breaks its current support level.
A bearish outcome would most likely be short-lived on account of the robust institutional demand. Aside from ETFs, other key events of 2024 are upholding the current optimism.
Other noteworthy factors include the shifting political climate and improving regulatory landscape. These are among the reasons for the optimism that has prevailed especially in regards to BTC’s bullish prospects in the coming months.
