Bitcoin Heads Toward Winning Streak Last Seen in Pandemic Before Record High

Sunil Jagtiani, Bloomberg News

(Bloomberg) -- Bitcoin is on course to advance for a fifth straight month in what would be the token’s longest such winning streak since a pandemic-era rally oiled by easy money.

The largest digital asset has risen about 2% in January, a month of pronounced swings sparked by the rollout of the first US spot Bitcoin exchanged-traded funds and shifting views on the outlook for monetary policy.

A run of five straight monthly gains would be the longest since a six-month stretch spanning October 2020 to March 2021, according to data compiled by Bloomberg. The token hit a record high of almost $69,000 in November 2021.

Spot Bitcoin ETFs from issuers including BlackRock Inc. and Fidelity Investments began trading in the US on Jan. 11. The token surged almost 160% last year ahead of the launches in a wager that the ETFs will attract new investors.

Bitcoin then posted a 12-day drop of about 21% after the funds went live as traders monitored how they fared. One of the products, the $21 billion Grayscale Bitcoin Trust, converted into an ETF on Jan. 11 from a closed-end format. Investors pulled money from the fund after the change but the pace of withdrawals has cooled, helping the token to claw back losses.

The slowdown in outflows from the Grayscale fund is “a substantial positive for market sentiment,” Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors LLC, wrote in a note on Monday.

The 10 ETFs overall have so far attracted a net $1 billion, data compiled by Bloomberg show. The group had the most successful ETF launch in history, going by both trading and flow metrics, according to Bloomberg Intelligence.

Investors are also awaiting the Federal Reserve interest-rate decision this week, having assigned roughly even odds to the prospect of a cut in March. Material changes to that outlook could impact Bitcoin and wider crypto markets given their sensitivity to changes in sentiment and perceptions of liquidity.

Bitcoin was little changed at $43,420 as of 7:34 a.m. Tuesday in New York. Smaller tokens like BNB and Cardano were mixed and traded in relatively narrow ranges.