Bitcoin Could Test Record Highs Next Week On ETF Flows, Analyst Says; Coinbase Surges On Upgrade
Cryptocurrency prices jumped Friday as bitcoin surged back near $67,000. Institutional investors poured hundreds of millions of dollars into spot bitcoin ETFs this past week. That could propel bitcoin toward its record highs as early as next week, one analyst said. Meanwhile, COIN stock surged after Coinbase received an upgrade and major price target hike from BofA.
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More than 600 investment firms over the past week revealed significant spot bitcoin ETF holdings, CoinTelegraph reported Thursday. The list included major banks and hedge funds, such as Morgan Stanley (MS), JPMorgan Chase (JPM), Wells Fargo (WFC) and UBS (UBS). The group collectively owns $3.5 billion worth of bitcoin ETFs. Hedge fund Millennium Management is the largest investor with $1.9 billion invested.
Millennium’s holdings include $844.2 million in the BlackRock iShares Bitcoin Trust (IBIT), $806.7 million in the Fidelity Wise Origin Bitcoin Fund (FBTC), and $202 million worth of the Grayscale Bitcoin Trust (GBTC). The firm also invested $45 million in the ARK 21Shares Bitcoin ETF (ARKB) and $44.7 million in the Bitwise Bitcoin ETF (BITB).
“Traditional institutions are here — and bitcoin ETFs are a key part of the story,” Nathan McCauley, co-founder and CEO of Anchorage Digital, wrote in a note to IBD. Anchorage Digital is a cryptocurrency infrastructure provider that offers investing and custody services for institutions.
“Recent 13F filings are a testament to the type of institutional participation that bitcoin ETFs promised to unlock. From hedge funds and endowments, to governments and pension funds, traditional players are driving hundreds of millions of dollars in ETF inflows,” McCauley said.
More institutions are expected to participate in the crypto markets as bitcoin liquidity increases, McCauley says.
Bitcoin ETF Inflow Streak
Meanwhile, spot bitcoin ETFs recorded $726.8 million in inflows so far this week, with four consecutive days of inflows through Thursday, according to U.K.-based Farside Investors.
FBTC led inflows for the period with $245.1 million for the week, followed by ARKB at $233.7 million. Since the Jan. 11 launch, total spot bitcoin ETF inflows stood at $12.409 billion as of Thursday. IBIT has been the clear leader with $15.596 billion in inflows. However, Grayscale has recorded $17.65 billion in outflows since its conversion to a spot ETF, which pulled the total inflow down to the $12.409 billion figure.
FXPro senior market analyst Alex Kuptsikevich believes the surge in inflows and institutional demand could propel bitcoin to test its record highs near $74,000 next week, CoinDesk reported Friday.
“If cryptocurrencies get support from the global risk appetite on Friday, bitcoin (price) could exceed $70,000 over the weekend,” Kuptsikevich wrote. “A test of the $71K-$74K highs area, in our view, could happen as early as early next week, triggering a new episode of FOMO (fear of missing out).”
Coinbase Surges On Upgrade
BofA on Friday upgraded Coinbase (COIN) to neutral from underperform, The Fly reported. The current macroeconomic environment has been positive for crypto market cap gains and trading volume growth, the firm wrote. Meanwhile, Coinbase has shown expense discipline and benefited from greater operating leverage after large cost cuts in 2022. BofA expects the greater operating leverage to help maintain profitability. Coinbase’s increase in revenue distribution should also dampen earnings volatility, the firm added. BofA hiked its price target to 217 from 110 — a level that Coinbase had run past in November.
COIN stock jumped 4.2% Friday on the upgrade. Shares are trading below their 10-week moving averages after steadily falling from the two-year high of 283.48 in late March. Still, Coinbase stock rallied about 19.4% so far this year.
Crypto Price Action
Bitcoin traded around $66,900 Friday after climbing as high as $67,458 to mark nearly a 3% gain over the last 24 hours. On March 14 bitcoin hit a new all-time high of $73,798. The cryptocurrency is below its prior peak of $68,990 set in November 2021. Bitcoin rallied nearly 11% this week and is up almost 59% in 2024.
Ethereum spiked 5.1% over the last 24 hours as of Friday to trade near $3,100. Ethereum is now a good distance from its March 12, 52-week high of $4,092, and well below its November 2021 peak above $4,800. On March 8, ETH crossed its $4,000 level for the first time in 26 months. The No. 2 crypto soared 35% in 2024.
Meanwhile, MicroStrategy (MSTR), which holds about $13 billion of bitcoin, leapt another 10% Friday. Shares of the software company have rallied more than 34.2% this week following Tuesday reports from Bloomberg that MSTR stock will join the MSCI World Index at the end of the month. MSCI made the decision based on market value following a review of its indexes. The change will take effect after market close on May 31.
MSTR stock soared almost 151% year to date.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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