- Bitcoin is approaching $70,000 as risk-on sentiment grows.
- Demand from institutional investors and individuals is pushing up crypto stocks.
- Bernstein points to market optimism towards riskier assets such as meme coins and mining stocks.
Bitcoin is approaching $70,000 again.
Increased inflows into exchange-traded funds (ETFs), meme coins, and crypto-related stocks indicate investors are willing to take on more risk in hopes of higher returns.
“Bitcoin ETF inflows, crypto stock markets, and retail trading sentiment scream risk-on,” Bernstein analysts said.
This increased momentum could drive both institutional and retail demand, further increasing volatility.
ETF flow
Institutional investor demand played a big role in Bitcoin's recent rally.
Since its approval in January, the Spot Bitcoin ETF has seen more than $21 billion in cumulative inflows, according to data from Farside.
With the rise in Bitcoin prices, the net asset value of these ETFs now stands at a record $66 billion, according to Presto Research analysts Min Jeong and Rick Maeda. This represents nearly 5% of the coin's total market value.
Bernstein analysts believe the surge in ETF inflows is due to asset managers focusing on wealth advisors and a broader range of investors, not just hedge funds.
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This change is creating more direct demand for Bitcoin.
Crypto assets and retail
Riding the bullish momentum, crypto mining stocks have soared over the past 30 days, Bernstein found.
Riot Platforms rose 37%, while CleanSpark and Marathon Digital rose 43% and 21%, respectively.
Over the same 30 days, Bitcoin rose 9%.
Bernstein also pointed to the “continued risk-on sentiment” that has seen Robinhood's active trader count increase 10% quarter-on-quarter and crypto trading revenue soar 160% year-over-year.
This optimism is likely to continue, Bernstein said.
meme coin
Meme coins are making a huge comeback, attracting new retail investors due to fears of missing out on the next big trend.
Bernstein said the total value of meme coins has tripled in the past six months to $66 billion, making them the “fastest growing coin category in cryptocurrencies.” pointed out.
One notable example is the GOAT meme coin.
The rise of the rumored AI-created token was fueled by support from AI bots on social media. Its value rose to more than $500 million in just five days, but has since fallen back to $370 million.
But Bernstein predicts that this interaction between AI and cryptocurrencies will create a rift with traditional finance, which “may struggle to adapt to the AI economy.”
