Bitcoin ETF Frenzy and Its Impact on Crypto Prices

Bitcoin ETFs have seen significant inflows, but this might not be the primary driver behind the recent surge in cryptocurrency prices. MarketWatch journalist Isabel Wang examines the role of spot bitcoin ETFs in fueling the rally of the world's oldest and largest cryptocurrency over the last couple of months. The introduction of spot bitcoin ETFs triggered a wave of new investor interest, potentially attracting those who had previously stayed away from the crypto market. Despite the excitement surrounding these ETFs, only a small fraction of the global bitcoin supply is currently held in U.S.-listed spot bitcoin ETFs. According to Morningstar Research Services analyst Ryan Jackson, the approval of these ETFs serves as a validation of bitcoin as an asset class. While the ETF approval brought some legitimacy to the volatile digital asset, its impact on the market might be limited as ETF investors and direct bitcoin investors do not necessarily overlap. The recent surge in bitcoin prices is also influenced by market conditions and upcoming events, such as the 'halving' event scheduled for April, which historically has led to price appreciation in the cryptocurrency market.