Bitcoin (BTC) market experiences renewed vigour as BlackRock's iShares Bitcoin Trust (IBIT) ETF nears $1 billion in inflows

Cryptocurrency market activity has surged in recent times, with Bitcoin's price hovering at its highest level in over two months and stablecoins like USDC expanding rapidly, reflecting both speculative enthusiasm and practical utility in the evolving digital economy.

As Bitcoin (BTC) teeters at $95,000, its highest level since early July, the cryptocurrency market is buzzing with activity. Speculative capital is flowing into the market, pushing Bitcoin to new highs and spurring interest in crypto-linked products.

For instance, BlackRock’s iShares Bitcoin Trust (IBIT) ETF saw a remarkable $970.9 million inflow on Monday, according to Farside Investors data. This marks the second-largest daily inflow for the ETF since its launch in January 2024.

This influx highlights the growing demand for Bitcoin among institutional investors. In contrast, competitors like Fidelity’s FBTC and ARK’s ARKB experienced substantial outflows, which could be attributed to investors shifting their preference towards BlackRock’s ETF.

Industry analysts, including Nate Geraci, CEO of Relative Value, and Eric Balchunas, a renowned analyst specializing in ETFs, have praised IBIT’s performance.

Earlier this year, many expressed skepticism about the appetite of traditional investors for Bitcoin exchange-traded funds. However, IBIT has exceeded expectations, becoming one of the most successful ETF launches in recent times.

On the derivatives front, CME Bitcoin Futures open interest has fallen for four consecutive days, indicating reduced leverage in the market as some traders scale back their positions.

Nevertheless, the annualised basis yield has climbed from 5% to 9%, which could entice traders back into the futures market to exploit the price spread between spot and futures contracts in the coming days.

In other developments, Circle, the company behind USDC, has secured in-principle regulatory approval from Abu Dhabi’s Financial Services Regulatory Authority to operate as a money services provider in the Middle East.

This approval is a strategic milestone for Circle, positioning USDC to capitalise on the region’s growing digital economy and fostering new investment opportunities in a market eager for blockchain solutions.

“We are pleased to have received this recognition from the Abu Dhabi regulator and to be expanding our business footprint in a hub of financial innovation,” said Jeremy Allaire, CEO of Circle.

This move aligns with Circle’s goal to embed itself in markets that are integrating blockchain technology as a foundation for financial innovation.

Meanwhile, USDC’s market capitalisation has surged by over 40% in 2023, increasing from $44 billion in January to $62 billion today, solidifying its status as the second-largest stablecoin after Tether’s USDT.

Earlier this year, USDC also became the first major stablecoin to achieve compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulations.

This integration is likely to foster greater institutional trust and adoption of USDC across Europe, where financial entities are increasingly exploring stablecoin integrations for payments and broader financial services.

Furthermore, Circle has expanded into Japan through a partnership with SBI Holdings, launching USDC to cater to Asia’s vibrant crypto market and tech-savvy population.

The expanding use cases of stablecoins are being driven by their utility in payments and remittances, offering a faster and more cost-effective alternative to traditional financial systems, especially in underserved regions with limited banking access.

In a move to enhance USDC’s functionality, Circle recently introduced a cross-border payments network, aiming to streamline international transactions and increase the stablecoin’s practical use cases for businesses and individuals.

However, Circle is currently in a quiet period following its filing for an initial public offering in the United States, limiting its ability to comment on future plans as it prepares for this significant milestone.