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Bitcoin (BTC) jumped out to a new all-time high this morning, helped along by breakout demand for spot-backed ETFs that continue to suck up BTC at a much faster pace than coins are mined into existence. BlackRock’s iShares Bitcoin Trust (IBIT) became the fastest ETF to ever reach $10 billion in AUM last week. IBIT will soon be allocated among the holdings of other BlackRock funds, following a new amendment filed with the SEC. On-chain metrics show further positive signals for Bitcoin’s ongoing momentum, but the ETFs have proven to be a disruptive force that has never existed in cryptocurrency markets before.

Bitcoin still accounts for more than half of the cryptocurrency market, which is a significant gain in dominance compared to the last time it traded at an all-time high. This suggests its relative performance, compared to all other digital assets, has been particularly strong over the past two years. It is possible that so-called “alt coins” may soon begin to pick up some of that slack with a new wave of ETF hype set to kick off over the next two months – this time focused on the second-largest cryptocurrency, Ethereum (ETH).

Related Assets & ETFs: Bitcoin (BTC-USD), Ethereum (ETH-USD), iShares Bitcoin Trust (IBIT), ProShares Ether Strategy ETF (EETH)

The market capitalization of Bitcoin (BTC) surged to an all-time high this morning, surpassing $1.35 trillion. For reference, that is right on par with the value of the world’s silver market. The unit price of BTC in USD terms also scraped $69,000, the highest level recorded since the previous November 2021 peak. Though Bitcoin gave up a chunk of its recent gains afterward, slipping back toward $65,500 by late Tuesday morning, the year-to-date return on the world’s largest cryptocurrency is now equivalent to nearly 50%. However, several ongoing developments suggest that Bitcoin and other cryptocurrencies may have further to go.

Traditional on-chain signals that MRP has covered in depth throughout our recent Crypto Wraps, including exchange balances and the accumulation/distribution pattern of long-term adopters, continue to signal that Bitcoin may still be in the midst of the most aggressive portion of its boom period. However, the advent and success of new spot-backed Bitcoin ETFs may be the most illustrative and impactful metric by which investor interest in BTC can be gauged. After less than two months of trading, these ten funds, which require sponsors to acquire Bitcoin to back the shares issued, custodied more than 776,185 BTC ($52.5 billion) on behalf of customers on March 4, with nine newborn funds adding a net 156,965 BTC on top of the pre-existing Grayscale Bitcoin Trust (GBTC) that was established in 2013 and converted to an ETF in January 2023.

Yesterday saw record inflows to the newborns and an easing of outflows from the hulking GBTC. Additionally, BlackRock showed it would begin allocating its iShares Bitcoin Trust ETF (IBIT) to other funds under its control, filing an amendment to add IBIT to the $36.5 billion Strategic Income Opportunities Fund (BSIIX). IBIT is the largest among the newly-created Bitcoin funds, breaching the AUM threshold of $10 billion last week faster than any other ETF in history. BTC demand flowing from the ETFs alone is vastly outstripping the new supply of BTC being created. For example, sponsors accumulated more than 30,000 BTC on behalf of their funds’ customers in the week spanning February 24 – March 1, but only…

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