Hello everyone, I'm Qing Yao. The crypto world in July has been like being detonated by a super bomb, with the inflow of funds into cryptocurrency ETFs resembling a raging tsunami, reaching twice that of other categories of fund inflows. This crazy data is reshaping the entire crypto landscape, and today I will take everyone through a thorough analysis!
Let's take a look at this shocking data. On July 10, the net inflow into the American spot Bitcoin ETF reached as high as $1.176 billion, achieving net inflows for six consecutive days; the spot Ethereum ETF was not far behind, with a net inflow of $383 million, achieving net inflows for five consecutive days. As of now, the cumulative fund inflow into the July Bitcoin ETF has surpassed the $50 billion mark. BlackRock's IBIT has accumulated over 700,000 BTC, and even more astonishingly, the annual management fee income of this ETF has exceeded that of its own S&P 500 ETF (IVV).
This phenomenon is significant. The massive inflow of funds into cryptocurrency ETFs indicates that institutional investors' interest in the cryptocurrency market is soaring. Previously, they mostly held a wait-and-see attitude, but now that real money is being poured in, it shows extreme optimism for future market trends. Institutions continuously increasing their positions have become the core driving force behind this round of price increase. Bitcoin is soaring and is almost breaking through $120,000, which is the strongest proof.
For ordinary investors like us, this is undoubtedly a significant signal. Institutions are diving in to buy heavily, instantly igniting market confidence. Many retail investors who were initially hesitant saw this situation and rushed to join in, pushing the market heat directly to a climax. Moreover, a large inflow of funds into cryptocurrency ETFs means that market liquidity has greatly increased, and the overall trading activity in the crypto sector will also significantly rise. For example, cryptocurrency-related stocks like Coinbase collectively opened higher before the market on July 11, with the world's largest exchange Coinbase (COIN) rising 2% before the market opened and then skyrocketing 4% after opening, showcasing the direct impact of the increased market heat.
However, we also need to look at it calmly. A massive influx of funds could lead to an overheated market, causing prices to be excessively pushed up. Once subsequent funding fails to keep up, the risk of correction will significantly increase. For instance, after the crazy influx of Bitcoin ETFs in July, there were also instances of capital outflow, with some products under certain issuers experiencing redemptions, and ARK Invest led by Cathie Wood saw the largest outflow, totaling $120 million.
Overall, the crazy influx of funds into cryptocurrency ETFs in July has had a huge impact on the crypto world, making the market direction even harder to predict. But this also means more opportunities; as long as we closely monitor market dynamics and stay calm, we might just be able to get a piece of the wealth pie in this wave! How the crypto world will develop in the future, let's wait and see together.