US exchanges take center stage
According to a recent report from Bloomberg, Bitcoin liquidity is increasingly concentrated in U.S. cryptocurrency exchanges, signaling a fundamental shift in market dynamics driven by the introduction of spot exchange-traded funds (ETFs) recently approved for the major digital asset. do.
U.S. trading venues have emerged as major hubs for BTC trading, accounting for nearly 50% of bids and asks within a 2% range of Bitcoin’s median price since the start of the year, citing data from research firm Kaiko.
Spot ETF changing the cryptocurrency market
The rise of spot Bitcoin ETFs in the U.S. has changed the landscape of digital asset trading, including the launch of several spot ETFs on January 11, along with the conversion of the Grayscale BTC Trust to an ETF.
According to Bloomberg, these US-based spot BTC ETFs have collectively attracted about $5 billion in investor inflows, pushing BTC prices to new highs over the past year.
Notably, trading venues currently account for nearly half of bids and asks within a 2% range of Bitcoin’s median price since the start of the year, but this contrasts with the trend seen in 2023, when non-US platforms primarily dominated BTC market depth. .
Market depth, which measures bid volume and ask volume close to the mid-price, indicates the level of liquidity necessary to execute an order without causing significant price movement.
Matthew Sigel, head of digital asset research at VanEck, one of the spot ETF issuers, said:
Bitcoin’s positive price action was most pronounced during US trading hours, especially when the market closed at 4pm.
Data from Kaiko shows that 57% of Bitcoin-versus-USD transactions currently occur during US market hours, up from 48% in 2023.
According to Bloomberg, the new spot ETF will help with Bitcoin price discovery by “calculating its net asset value against a specific benchmark in the U.S. market that closes each weekday.”
Commenting on this, David Lawant, head of research at cryptocurrency prime broker FalconX, said the process provides a “transparent and trusted reference point”, allowing investors to consolidate “large trades at any given time”, potentially minimizing the impact on the market. He said there was.
Bitcoin market outlook
Meanwhile, despite a slight retracement of 1.2% over the past 24 hours, BTC has maintained its upward trajectory, currently trading above $51,000, still up more than 20% in recent weeks.
Lawant advises investors to closely monitor spot BTC ETF inflows, as price movements may coincide with changes in buying activity.
This sentiment was echoed by market expert Michaël van de Poppe, who predicts a potential correction in BTC could reach up to 40%.
Featured image by Unsplash, chart by TradingView
