(Bloomberg) — Bitcoin is approaching $80,000 for the first time since January — a stealth recovery built not on euphoria but on short covering and the relentless accumulation by one company: Strategy Inc.
Investors have added some $2 billion into Bitcoin ETFs over the past month, Bloomberg data show, with net flows turning positive in March for the first time in four months. Meanwhile, Strategy, the firm helmed by Bitcoin-backer Michael Saylor, has bought $3.9 billion worth of the token so far this month, the most in a year, according to company data compiled by Bloomberg.
To those who aren’t glued to the ticker tape on a daily basis, the move may come as a surprise — Bitcoin has quietly added about 14% since the end of March, reviving hopes among diehards that the coin’s turnaround is here to stay.
To the faithful, it’s an encouraging sign as rising shares of the largest corporate Bitcoin accumulator and stronger ETF inflows drive up demand for the token. The derivatives markets are also pointing to a more optimistic shift. “We’ve seen incrementally more bullish expressions in Bitcoin over the past week,” said Bohan Jiang, senior derivatives trader at FalconX.
The furtive recovery in the crypto market has dripped in slowly over recent days. Earlier in the year, just about every rally had been met with near-immediate selling by those looking to break even or cut their losses. But Bitcoin’s lap toward $80,000 has brought along other coins, as well: Ether is up 10% over the past month to around $2,300, and certain smaller coins have also benefitted.
A greater number of analysts have pointed to Strategy’s role within the market. As a Bitcoin treasury firm, its primary purpose has been to accumulate Bitcoin using money raised across the capital markets. In March, Strategy has begun to deliver on a long-promised pledge to fund the purchases more with proceeds raised from the sale of preferred shares. That has helped to assuage concern about dilution among holders of the common shares.
The demand continues to be driven by Strategy, and some short sellers that are buying Bitcoin and covering their positions in futures with positive signs in the options market as well, Jiang said.
The increasing buying from Strategy and ETFs came on the heels of skeptical traders building short positions in Bitcoin perpetual futures, a key gauge of market sentiment, with the funding rates for such contracts seeing one of the longest negative streaks since the implosion of crypto exchange FTX pummeled the industry in 2022.
“With funding skewing negative across major venues, that’s a cautious market, not a capitulating one,” said Matt Howells-Barby, vice president at crypto exchange Kraken. “BTC has held key levels well this past week, and a sustained move above that zone is where we’d expect the bullish flip.”
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