Bitcoin moved higher on Thursday as investor appetite for risk improved.
Optimism surrounding a possible agreement to reopen the Strait of Hormuz supported wider market sentiment. Stronger capital flows into spot Bitcoin exchange-traded funds also helped the world’s largest cryptocurrency.
However, the broader crypto market remained cautious. Many digital assets struggled to gain momentum following sharp losses earlier in the year.
At 07:54 ET, or 11:54 GMT, Bitcoin was trading 0.8% higher at $64,609.10.
AI Stocks Continue to Compete With Crypto
Investor interest in cryptocurrencies remains relatively weak compared with demand for artificial intelligence stocks.
AI-related companies have continued to attract significant capital, limiting the amount of money flowing into speculative assets such as Bitcoin and altcoins.
Mixed earnings from cryptocurrency companies have also affected sentiment.
Recent results from Strategy and Coinbase disappointed investors. Circle shares also fell after the company’s second-quarter revenue missed market expectations.
Strait of Hormuz Deal Supports Risk Appetite
A possible agreement to reopen the Strait of Hormuz became one of the main market drivers this week.
Iran indicated that it was close to reaching an arrangement with Oman concerning shipping through the strategically important waterway.
U.S. President Donald Trump also said discussions with Iran were progressing well.
However, Tehran has denied that direct negotiations with Washington are taking place.
Despite the conflicting statements, the possibility of reopening the Strait of Hormuz helped reduce concerns about disruptions to global energy supplies.
Lower Oil Prices Ease Inflation Concerns
Hopes of improved shipping conditions pushed oil prices lower.
Investors expect a reopening of the Strait of Hormuz to support crude exports from West Asia and reduce the risk of energy shortages.
Lower oil prices could also prevent another increase in energy-driven inflation.
Although physical oil shipments do not directly affect Bitcoin, developments in energy markets can influence broader investor confidence.
Improved market sentiment often supports speculative assets, including cryptocurrencies.
Bitcoin Remains Below Its Record High
Bitcoin has traded within a relatively narrow range since the conflict involving the United States, Israel and Iran began in late February.
The cryptocurrency has remained close to the $60,000 level for much of that period.
Despite Thursday’s increase, Bitcoin is still trading nearly 50% below the record high reached in October.
This weak performance shows that investors remain cautious despite occasional improvements in risk appetite.
Spot Bitcoin ETF Inflows Recover in August
Capital flows into spot Bitcoin ETFs improved during the opening days of August.
According to data from SoSoValue, these funds attracted approximately $626 million in net inflows so far this month.
That represents a significant increase from the $172.4 million recorded during July.
The improvement suggests that institutional and professional investors may be gradually returning to Bitcoin-related investment products.
ETF Recovery Still Faces Questions
It remains uncertain whether the stronger inflows will continue throughout August.
Spot Bitcoin ETFs recorded combined outflows of almost $7 billion during May and June.
Concerns about additional Bitcoin sales by Strategy could also place pressure on the market.
A sustained period of ETF inflows may be needed before investors become more confident about a broader Bitcoin recovery.
Altcoins Deliver Mixed Performance
The wider cryptocurrency market produced mixed results as traders responded to limited positive catalysts and disappointing corporate earnings.
Ether, the world’s second-largest cryptocurrency, gained 2% to trade near $1,906.90.
XRP fell 1.1% to approximately $1.0499.
Solana was little changed, while Cardano declined 1.6%. BNB also remained broadly flat.
Among major memecoins, Dogecoin and the TRUMP token each fell by approximately 1%.
Bitcoin Outlook Depends on ETF Demand
Bitcoin’s next major move may depend on whether spot ETF inflows continue to strengthen.
Further diplomatic progress involving the Strait of Hormuz could also support risk appetite by reducing concerns about oil supplies and inflation.
However, weak cryptocurrency earnings, competition from AI stocks and the possibility of further large-scale Bitcoin sales may continue to limit gains.
For now, Bitcoin remains ahead of most altcoins, but the wider cryptocurrency market has yet to show signs of a convincing recovery.
