Bitcoin Recovers Above $90,000 – ETF Investors Back in the Black

Bitcoin Breaks Through Key Price Level

Bitcoin has recovered from its recent price correction and reclaimed the psychologically important $90,000 mark. This has put Bitcoin spot ETF investors back in profit territory. The cryptocurrency climbed above the critical threshold of $89,600, the average entry price for ETF investors^[2].

Two weeks ago, a price correction pushed Bitcoin ETF holders below their average acquisition costs, forcing many investors to temporarily realize paper losses^[2]. According to Glassnode analyst Sean Rose, this critical level was around $89,600^[2].

Interest Rate Cut Expectations Drive Recovery

Bitcoin's price recovery coincides with a marked increase in expectations for an interest rate cut by the US Federal Reserve. The probability of a 25 basis point rate cut at the December 10 meeting has risen from 39 percent to 85 percent within a week^[2]. This data comes from the CME Group's FedWatch Tool^[2].

The increased expectations for rate cuts have noticeably reduced pressure on cryptocurrency markets and led to price stabilization.

Long-Term Investors Stand Firm

Despite temporary losses, most ETF investors remained unfazed. "Most ETF holders are long-term investors," explained Vincent Liu, Chief Investment Officer of quantitative trading firm Kronos Research, to Cointelegraph. "Paper losses do not lead to quick sales"^[2].

This sentiment reflects growing confidence among institutional investors in Bitcoin as a long-term investment. Bitcoin spot ETFs have seen substantial inflows since their launch earlier this year and are considered an important factor in the increasing acceptance of cryptocurrencies in the traditional financial sector.

Star Investors Not Immune to Losses

Meanwhile, the example of Arthur Hayes, co-founder of crypto exchange BitMEX, demonstrates that even experienced investors are not safe from losses. Hayes recently suffered losses trading the Ethena (ENA) token^[1].

According to blockchain analysts at Lookonchain, Hayes purchased 873,671 ENA tokens for $245,000 at an average price of $0.28^[1]. Previously, however, he had sold 5.01 million ENA at a price of $0.275^[1]. The loss-making sale occurred despite Hayes holding an estimated crypto portfolio of $47.5 million, largely invested in Ethereum^[1].

Despite the losses, Hayes remains optimistic about the long-term prospects of the cryptocurrency market. In an interview with BTC-ECHO, he stated that new monetary easing by the US Federal Reserve could soon drive Bitcoin prices to new heights^[1].

Outlook

The current market recovery suggests that Bitcoin could benefit from a more favorable macroeconomic environment. The expected Federal Reserve interest rate cut would increase the attractiveness of alternative assets such as Bitcoin and could lead to further price gains.