Bitcoin Rises on Weak S&P500 Decoupling, ETF High-Frequency Trading and DBTC Net Outflows Decline, and MicroStrategy Buys More
Bitcoin's move above $55K is notable because it is only 25% away from its all-time high before being halved. We turned to crypto analysts to see what they had to say.
Crypto on-chain analytics platform Santiment reports via X that "Bitcoin surged last night, hitting a high of $54,900 while the S&P500 index fell. This suggests that cryptocurrencies are becoming less dependent on the US stock market." "Historically, when the correlation between crypto markets and Wall Street declines, bitcoin and altcoins have seen the biggest gains," Santiment added.
Further analyzing the rally, James Butterfill, head of research at Coin Shares, attributed the recent spike in trading volume in some bitcoin spot ETFs to high-frequency trading (HFT) by institutional investors. "We've seen this in some European ETFs before the spot ETFs. In fact, some quant funds are suspected of engaging in algorithmic HFT," he added. Last week, VanEck's BTC spot ETF saw an explosion in trading volume, with more than $400 million traded daily. The day before, the U.S. Bitcoin Spot ETF saw $3.2 billion in daily trading volume, the largest volume since its launch.
As further evidence, Bloomberg ETF analyst James Seyffart noted, "Grayscale's bitcoin spot ETF GBTC saw net outflows of about $22.4 million on Dec. 26 (local time). That's the smallest outflow since the spot ETF's inception." Meanwhile, MicroStrategy, which bought an additional 3,000 BTC on the 25th, now holds 193,000 BTC worth $6.1 billion at an average price of $31,544 per BTC.
