The Bitcoin price is on the comeback as it breached the $96,000 mark, resuming its rally since January. With the momentum it has acquired, Bitwise CIO Matt Hougan expects the token to see a parabolic rise, given the BTC ETF continues with its current inflow.
Bitcoin Price Jumps to Year High of Above $96,000
The token surged past the $96,000 mark in the late trading session on Tuesday night. This is the highest the token has been all year and the best performance since November. The token increased by a cumulative 5% within a period of 24 hours. The token touched a daily high of almost $96,654 before settling at $95,000.
New data show that the recent momentum in the Bitcoin price was fueled in part by institutional involvement. SoSoValue numbers showed U.S. spot BTC ETFs saw over $750 million in net inflows in a single day of trade.
Fidelity’s FBTC kicked off this trend with a cumulative total of more than $12 billion and daily figures topping $350 million, followed closely by Bitwise’s BITB with a tally of nearly $160 million.
However, this triggers a precedent where BTC price has seen a substantial increase in its value solely by virtue of U.S. demand.
In addition to ETF flows, inflation figures from the U.S. economy came as expected in the month of December with the level of CPI being pegged at 2.7% from the previous year. These numbers have eased concerns relating to inflation rates associated with U.S. tariff policy changes.
At the same time, uncertainty over the outcome of pending court decisions related to the Trump tariffs has been keeping the markets anxious about the Bitcoin price’s next move. The administration, however, has a Plan B in case of a negative ruling.
Bitwise CIO Sees Long-Term BTC ETF Demand Driving Upside
Matt Hougan wrote that the sustained demand within the ETF market may result in a shortage of Bitcoin. He analyzed the market structure of the current BTC price by comparing it with gold.
He went on to explain that although the BTC ETFs have managed to absorb quantities of units that have been above new supply in the market, this fact has not been well represented in the pricing of the assets. The Bitwise CIO, however, thinks differently.
“Since ETFs debuted in Jan 2024, they’ve been buying more than 100% of the new supply of bitcoin. But the price hasn’t gone parabolic, because existing holders have been willing to sell. If ETF demand persists, and I think it will eventually, these sellers will run out of ammo.”
Notably, the latest surge in BTC ETF inflows follows a previous increase last week. On the other hand, the unexpected rise in the Bitcoin price caught many traders by surprise. In the last 24 hours, the crypto market recorded the highest liquidations of short positions of around $688 million, as per data on CoinGlass.