Bitcoin BTC $68,135 rose 4% between Oct. 23 and Oct. 24, following a retest of the $65,200 level. While this movement has largely been linked to a reversal of the previous day's outflows in spot Bitcoin exchange-traded funds (ETFs), the broader macroeconomic environment and a rally in tech stocks have also contributed to boosting investors’ risk appetite. In fact, several factors help explain Bitcoin's recent price increase.
The $79 million in net outflows from US spot Bitcoin ETFs on Oct. 22 raised some concerns, particularly as Oct. 23 marked the highest level for the US US Dollar Index (DXY) in three months, suggesting that traders were shifting to cash for safety.
Additionally, weak US real estate data on Oct. 23 sparked fears of a slowdown in the world’s largest economy. According to the Mortgage Bankers Association, US mortgage applications for home purchases and refinancing fell to their lowest levels since August during the week ending Oct. 18, marking the third consecutive decline. This drop was primarily driven by rising mortgage costs. As Bloomberg noted, “still-elevated asking prices risk extending a more than year-long period of sluggish housing demand.”
However, the uncertainty surrounding the weakening US economy faded when $192 million in spot Bitcoin ETF inflows were announced on Oct. 23. Interestingly, this surge was driven entirely by BlackRock’s iShares IBIT, as both Bitwise’s BITB and Ark’s ARKB saw $124 million in net outflows on the same day. Furthermore, recent earnings reports and positive job market data have made investors less risk-averse.
