Bitcoin price rises thousands of dollars on historic day for ETFs

The Bitcoin price has risen by more than 6 percent in the past 24 hours to $63,000 on a historic day for the ETFs. For the first time since its launch, the Grayscale Bitcoin ETF achieved a capital inflow. In total, the ETFs raised $365 million in capital yesterday.

Why did the Bitcoin price rise so aggressively in recent days?

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Why is the Bitcoin price rising?

The main reason for the Bitcoin price increase of several thousand dollars is of a macroeconomic nature.

On Friday it was announced that the American labor market is weaker than expected. Unemployment rose to 3.9% while an expected score of 3.8% and in April the economy added tens of thousands fewer jobs than previously expected.

So why is this weakening of the US labor market bullish for Bitcoin? After all, you would say that a weaker labor market should scare people and possibly cause people to sell their Bitcoin to hedge against that uncertainty.

The answer to that question is that a weaker labor market means that the US central bank may start cutting rates sooner.

In recent months, Bitcoin has suffered disappointment after disappointment in terms of inflation. During the first quarter of 2024, US inflation rose faster than expected, forcing the US central bank to further postpone its interest rate cuts.

While the market was still expecting 5-7 interest rate cuts at the beginning of 2024, that expectation dropped to 0-1. This has put a huge strain on the price in recent weeks, causing Bitcoin to lose positive momentum since reaching its all-time high on March 14.

Now the provisional bottom appears to have been reached and we can cautiously look up again, because the weakened labor market makes the market more positive about the number of interest rate cuts that the US central bank will implement in 2024.

In addition, American consumer confidence is currently “souring”, which does not improve the prospects for the economy. This could also lead to the central bank having to cut interest rates more quickly, which is positive for Bitcoin.

Historic day for the Spot Bitcoin ETFs

As a result of this negative economic data, which was positive for Bitcoin, the Spot Bitcoin ETFs saw massive capital inflows for the first time in a long time.

The most special thing was of course the influx at Grayscale. For the first time since the launch of Grayscale’s ETF, no Bitcoin and capital flowed out of that fund, which just goes to show how bullish everyone is suddenly.

Now we have to hope that Bitcoin can maintain that. The first important “point on the agenda” for Bitcoin is the weekly closing. If Bitcoin manages to close above $60,000 this week, that price will provide major support on the chart.

In the coming hours, the focus will be on that $60,000 limit, but next week it will be all about the marbles again and the ETFs must ensure new inflows.

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