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Bitcoin Price Surges as Morgan Stanley Reveals Holdings

Bitcoin has been on an upward trajectory, buoyed by encouraging US CPI data indicating a slowdown in price pressures
May 16, 2024

Bitcoin (BTC) is on the rise this week, bolstered by the release of US CPI data indicating moderating price pressures. Additionally, major financial institutions such as Morgan Stanley have disclosed substantial holdings in US spot Bitcoin ETFs.

As of the latest update, Bitcoin is trading just below $66,000, having recently hit monthly highs surpassing $66,750.

Morgan Stanley's Wednesday 13F filing unveiled a significant investment of $270 million in spot Bitcoin ETFs. The investment banking and asset management giant had previously signaled its intention to venture into BTC exposure, and now it's set to recommend spot Bitcoin ETFs to its clients.

This revelation from Morgan Stanley coincides with similar disclosures from numerous institutional investors. Q1 13F filings reveal that over 500 asset managers have invested in spot Bitcoin ETFs. Leading the pack is Millennium Management, with holdings nearing $2 billion, representing approximately 3% of its $64 billion assets under management.

According to Bloomberg ETF analyst Eric Balchunas, Millenium Management is the current "king" of ETF holders, with spot Bitcoin ETFs boasting around 200 times the average number of holders for a new ETF. Impressively, various institutional types are represented among the first 13F filings, including the State of Wisconsin Investment Board, which disclosed holdings of almost $100 million in spot BTC ETFs.

Bitcoin enthusiasts are optimistic that the increased institutional adoption of Bitcoin via ETFs, coupled with favorable macroeconomic conditions, could propel the price back above $70,000 in the near future.

Following positive US CPI numbers, spot Bitcoin ETFs witnessed net inflows of over $300 million on Wednesday, as reported by The Block. This surge helped Bitcoin reclaim its 21 and 50-day moving averages (DMAs), pushing it to fresh monthly highs.

To continue its upward trajectory, Bitcoin needs to surpass its late April highs of $67,000, potentially paving the way for a retest of yearly highs. Observers note that US equities could provide a leading indicator for Bitcoin's price movements, especially considering the S&P 500's recent record highs.

While historical patterns suggest a bullish trend for Bitcoin post-halving, with new record highs typically seen after 4-6 months, the current rally is bucking this trend. Bitcoin is evolving into a mature macro asset, with less predictable long-term patterns than in previous years. Despite the usual summer slowdown in risk assets, Bitcoin's recent performance suggests a deviation from historical norms.

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