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A tremendous amount of pent-up demand followed the coming to market in January of nine Bitcoin exchange-traded funds (ETFs) in America. This led to staggering flows of money into Bitcoin, but we’re still in the early stages of this new era.

The financial advisory sector in the US, which looks after savings of around $40 trillion, has largely not been participating in the Bitcoin ETFs, or in Bitcoin more broadly. Most pension funds and the largest endowments in the world have likewise sat on the sidelines.

Zooming out further, despite Bitcoin’s 45pc rise in February and its further spurt since, investors should tread carefully into March, a month that presents seasonal risk from traditional finance that crypto may not be immune from.

Firstly, there’s contagion risk among American banks because a problem in one financial institution can create a problem for otherwise healthy ones, as was the case with the collapse of Silicon Valley Bank a year ago, which spooked depositors and led to a wider bank run. There’s also the risk of investors cashing in their Bitcoin profits to cover payments around tax season.

Also, accelerating cash inflows into Bitcoin ETFs have overpowered technical signals of “overbuying” – any normalisation of this in the next few weeks could dent Bitcoin’s price surge.

Another potential cause of a price correction is simply that the crypto market is showing signs of overheating. The Crypto Fear & Greed Index stood at 85 during the price surge a week ago, signalling extreme greed in the market (it has since fallen to nearer 80).

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