Bitcoin Tops $70K Amid Surge of ETF Inflows

Bitcoin has broken through the $70,000 mark for the first time since June, buoyed by a surge of inflows into Bitcoin exchange-traded funds (ETFs) in the United States.

The leading cryptocurrency reached a high of above $71,100 on October 29th, representing a nearly 5% gain in the past 24 hours. Bitcoin is now just 5% away from its all-time high of around $73,700 set back in March 2024.

The latest rally in Bitcoin’s price appears to be driven by heightened demand from US-based investors. According to data from CoinShares, Bitcoin funds recorded $920 million in inflows for the week ending October 25th, bringing the year-to-date total to $25.4 billion. This followed the prior week’s strong inflows of over $2.1 billion into the 11 US-based spot Bitcoin ETFs.

“We believe that current Bitcoin prices and flows are heavily influenced by US politics, with the recent surge in inflows likely linked to the Republicans’ poll gains,” the CoinShares report noted.

Prediction markets are currently showing a 60% chance of a victory for Republican candidate Donald Trump in the upcoming US presidential election on November 5th. Trump has taken a more favorable stance towards cryptocurrencies compared to his opponent, Vice President Kamala Harris, who has advocated for tighter regulation.

The prospect of a Trump win appears to be driving increased demand for Bitcoin, seen by some investors as a hedge against potential changes in US policy under a new administration.

Beyond the political factors, Bitcoin’s technical indicators are also flashing bullish signals. The cryptocurrency recently saw a “golden cross” formation, where its 50-day moving average crossed above the 200-day moving average – a pattern that has historically preceded significant price rallies.

However, Bitcoin remains vulnerable to volatility, as evidenced by its brief dip to $66,510 on October 25th following news of a US probe into stablecoin issuer Tether. Analysts will be closely watching whether Bitcoin can consolidate above the $70,000 level in the coming days and weeks, a key hurdle before potentially challenging its all-time high.

“Bitcoin needs to maintain a solid break past $70,000 to build confidence in surpassing its previous record,” said Tony Sycamore, a market analyst at IG Australia Pty.

With the US election, Federal Reserve policy decisions, and employment data all on the horizon, the crypto markets are bracing for potentially turbulent times ahead. But for now, Bitcoin bulls are relishing the cryptocurrency’s latest foray into uncharted territory above $70,000.