Bitcoin Rebounds: Surges 7% to $70,000 After US ETF Withdrawals

The world's largest cryptocurrency, Bitcoin, has staged an impressive comeback, surging back to the $70,000 level with a remarkable rise of over 7 percent. At 7:30 am UTC on Tuesday, the cryptocurrency soared to $71,508, signaling renewed bullish momentum in the market.

This surge in prices comes amidst a backdrop where Bitcoin enthusiasts appear undeterred by recent outflows from US exchange-traded funds (ETFs). According to a Bloomberg report, nearly $900 million was withdrawn from these ETFs last week, reflecting ongoing outflows from the Grayscale Bitcoin Trust alongside a slowdown in subscriptions for offerings from BlackRock Inc. and Fidelity Investment. However, market sentiment remains resilient, with Bitcoin enthusiasts demonstrating a willingness to buy the dip, evident from the substantial bids around the $60,000 area.

Nathanaël Cohen, co-founder at the digital-asset hedge fund INDIGO Fund, highlighted this sentiment, stating, "Even though ETF inflows have hit a drag, order books are loaded on the bid side around the 60k area, showing that the market is eager to buy the dip.

You need to go get the liquidity at lower levels to then catch a bid and generate momentum to go higher," as quoted by Bloomberg. The recent surge in demand for Bitcoin ETFs has been a significant driver behind this year's remarkable rally in the leading cryptocurrency. 

Strong inflows into these funds have sparked optimism for exponential growth within the asset class, attracting a broader range of investors. However, significant outflows observed last week have prompted traders to hedge against potential price declines, resulting in notable liquidations in leveraged bullish positions within the cryptocurrency futures market.

In another notable development, the London Stock Exchange has announced plans to make Bitcoin and Ethereum available for trading as exchange-traded notes (ETNs). Subject to the necessary procedures, trading is slated to commence on May 28, 2024. This announcement serves as yet another confidence booster for the crypto ecosystem, according to Ashish Singhal, Co-founder of CoinSwitch.

Meanwhile, other cryptocurrencies such as Ether saw an approximate 6 percent increase in value, while Solana and Dogecoin surged by over 4 percent. Furthermore, stocks of crypto companies also witnessed significant gains, with MicroStrategy, known as a proxy for Bitcoin, surging by 20 percent. Coinbase Global, a prominent crypto exchange, saw a 9 percent increase, while Marathon Digital, a cryptocurrency miner, experienced a 5 percent rise.