Bitcoin breaks $65,000: Analysis of growth factors and hidden risks
This week, Bitcoin once again crossed the psychologically important threshold of $65,000, showing a daily increase of 1.4% and a weekly increase of 5.2%. However, behind this seemingly confident upward movement lies a complex and ambiguous picture. Let's break down the key catalysts and assess the real strength of the current uptrend.
ETF Inflows: Positivity Amid Historical Outflows
The main driver of growth was the expectation of renewed negotiations between the US and Iran, which reduced geopolitical risks and spurred demand for risk assets. Additionally, we are seeing a second consecutive week of net inflows into US spot Bitcoin ETFs. Last week, $197.4 million flowed into the funds, and over the past two weeks, a total of $273.1 million.
However, don't be fooled. This amount represents only 3.3% of the massive $8.2 billion that investors withdrew from ETFs over the previous two months. June was the worst month in the instrument's history with outflows of $4.5 billion, and nearly 79% of that amount came from BlackRock's iShares Bitcoin Trust (IBIT). The current total assets under management of the funds—around $77 billion—are still far from the May peak of $104 billion.
Citi's Bearish View vs. BlackRock's Optimism
Opinions on Wall Street are divided. Citi lowered its 12-month Bitcoin forecast to $82,000, predicting zero net inflows into ETFs over the next year due to regulatory stagnation and weak institutional demand. In contrast, BlackRock CEO Larry Fink stated that the sell-off phase is over, pointing to renewed inflows.
Bloomberg Intelligence Senior Analyst Eric Balchunas draws parallels with gold. He notes that the gold ETF GLD went through a similar cycle: rapid growth, a painful drawdown, and a long, patience-demanding recovery, after which each new peak was higher than the previous one. Currently, IBIT has corrected approximately 48% from its all-time high of $126,080.
My analysis: The current recovery is not the start of a new bull rally, but rather a "weak bounce" following a severe sell-off. The market remains unstable, and ETF data indicates high investor sensitivity to macroeconomic news. Until we see sustained and consistent capital inflows into the funds, any growth above $65,000 will be perceived as an opportunity for profit-taking, not as a buy signal. The key risk is the growing expectations of a Fed rate hike, which are being priced into bond yields and putting pressure on all risk assets, including Bitcoin.