ETF Flows Power Bitcoin Rally, Not Leverage
The current Bitcoin rally may be more sustainable than previous crypto booms due to a shift from leverage-driven buying pressure to demand from spot ETFs, according to Mizuho analyst Dan Dolev.
Dolev cites three key signs that the crypto market is approaching a sustained recovery: lower leverage, a potential revival in retail activity, and a sharp increase in institutional demand through spot ETFs.
The most striking trend is the surge in ETF inflows, with U.S. spot Bitcoin ETFs attracting $1.9 billion in net inflows last week after five consecutive sessions of buying, led by BlackRock's iShares Bitcoin Trust (NASDAQ:IBIT).
This marks a significant shift from previous rallies, which were often driven by leverage and can quickly unwind when traders are forced to close positions.