Bitcoin Approaches $65,000 on Renewed ETF Inflows and Geopolitical Optimism

Bitcoin's price advanced toward the $65,000 mark on Thursday, buoyed by a combination of improving macroeconomic sentiment and a notable resurgence in demand for spot exchange-traded funds (ETFs). By 02:18 ET (06:18 GMT), the world's largest cryptocurrency had risen 0.8% to trade at $64,739.1.

Key Market Drivers

Investor risk appetite was bolstered by geopolitical developments, specifically the anticipation of a deal to reopen the Strait of Hormuz after Iran signaled it was close to an agreement with Oman. While physical oil flows have no direct link to crypto markets, the prospect of averting an energy-driven surge in inflation tends to improve sentiment for speculative assets like Bitcoin.

In a more direct catalyst, capital inflows into U.S. spot Bitcoin ETFs gained significant momentum in early August. According to data from SoSoValue, these investment products have seen net inflows of $626.0 million so far this month. This marks a sharp acceleration from the $172.4 million total inflow for July and a reversal from the nearly $7 billion in combined outflows recorded during May and June.

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Broader Crypto Market Context

Despite Bitcoin's advance, the wider cryptocurrency market remained mixed, indicating that investor sentiment is still cautious. While Ether, the second-largest crypto asset, gained 2.2% to $1,912.90, other major altcoins lagged, with XRP falling 1.5% and Cardano declining 2.8%.

Overall sentiment toward the sector remains lukewarm following sharp losses earlier this year and a series of middling earnings reports from crypto-related firms. Even with the recent gains, Bitcoin is still trading nearly 50% below its record high set in October.