Bitcoin’s about to breach the $100,000 barrier. It’s all on the back of big ETF inflows, which have given a jolt to renewed optimism in the crypto community. The recent surge of the cryptocurrency has made the market’s mood decidedly bullish. Bitcoin is poised to touch a level not seen since way back in early February. Bullish ETF activity and signs of regulatory clarity are leading to an optimistic market for the top crypto.

Bitcoin's price experienced a notable increase on April 25, climbing 0.82% and building on the previous day's 0.28% gain to settle at $94,777. This upward momentum has positioned Bitcoin to potentially surpass $100,000 for the first time since February 4, marking a significant milestone in its price recovery. The price rally seen in recent weeks is an indicator of rekindled investor optimism and increased interest in the burgeoning cryptocurrency space.

Bitcoin ETF Inflows Drive Price Surge

Specifically, Bitcoin’s price trends are tightly correlated to the inflows into Bitcoin ETFs. Released on April 25th, and with ARK 21Shares Bitcoin ETF (ARKB) generating fantastic net inflows of $11.4 million. At the same time, the Grayscale Bitcoin Mini Trust (BTC) President Showboater performed even better with high net inflows at $19.9 million. For comparison, the Fidelity Wise Origin Bitcoin Fund (FBTC) had net outflows of $108 million.

Despite FBTC seeing net outflows, the US BTC-spot ETF market is performing like an emerging market on an upswing. If successful, it would be on track for its biggest weekly net inflows since debuting on January 11, 2024. Bitcoin ETFs experienced a record inflow of $442 million on April 24. This came on the heels of another avalanche of $917 million on April 23, further proving the tremendous institutional interest and demand for Bitcoin exposure.

Market Optimism Returns

The recent rebound of Bitcoin’s price above $95,000 has sent the crypto world into a frenzy of optimism. Santiment, a cryptocurrency analytics platform, observed the change in market sentiment.

Bitcoin’s unexpected breakout has flipped the script for the crypto community. Data shows a surge in optimism from the crowd as BTC rebounded above $95K for the first time since February. As for the level of greed being measured across social media, this is the highest spike in bullish (vs. bearish) posts since the night Trump was elected on November 5, 2024.” - Santiment

This excitement and optimism is matched by exciting legislative developments, including the reintroduction of the Bitcoin Act by Senator Cynthia Lummis. The Bitcoin Act proposes that the US government acquire one million Bitcoin over five years, with a 20-year lock-up, signaling potential long-term commitment and confidence in the digital asset.

Bullish and Bearish Scenarios

Several factors could influence Bitcoin's future trajectory. In the bullish case, we see some dovish signals from the Fed. De-escalation in the US-China trade war, booming economic data, legislative love from crypto-friendly states, ETF inflow and overall bullish sentiment. Conversely, a bearish scenario involves an escalating US-China trade war, hawkish Fed policies, weak US economic data, legislative resistance, and ETF outflows.

Regulatory clarity is the second key factor that could drive more crypto adoption in the US. Judge Torres’ ruling on the settlement has the potential to be highly consequential for Ripple, and indeed the crypto market at large. This decision could offer real, much-needed regulatory clarity.

Innovation has been stifled for the last several years due to market and regulatory uncertainty that, unfortunately, the SEC has fostered. - Chairman Atkins