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Bitcoin: ‘Bigger forces than ETF’ a factor, thanks to ‘other players’

2min Read

Did ETFs trigger the shift in Bitcoin market sentiment from bearish to bullish? Eric Balchunas says no!

BTC volatile price

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  • GBTC outflows totaling $1.4 billion in a week’s time suggest an increased investor interest. 
  • Post-price crash, Bitcoin highlighted bullish sentiment following Jerome Powell’s optimistic announcement. 

The recent approval of Bitcoin [BTC] Exchange-Traded Funds (ETFs) by the United States Security and Exchange Commission (SEC) has definitely been a game changer in the cryptocurrency landscape.

This milestone has pushed Bitcoin to surpass its previous all-time high, surging past the $70,000 mark. However, the surge was not long-lived, and according to the latest update Bitcoin was trading at $66 000. 

Eric Balchunas, Bloomberg’s senior Bitcoin ETF analyst, argues that Bitcoin’s volatile price movements are not directly influenced by BTC ETFs. 

Taking to X (formerly Twitter), Balchunas noted, 

“Interesting is price of bitcoin still went up yesterday and yet it went down second half of last week when Ten saw net inflows = there are other players controlling this market. ETFs def a factor but bigger forces at work here.”

This underscores that the surge in institutional investors and heightened investor interest are key drivers of Bitcoin’s demand and supply. However, ETFs might have an indirect impact on Bitcoin’s price through increased adoption and market validation.

GBTC’s market performance

Balchunas also outlined the significant $GBTC outflows worth $ 1.4 billion this week indicating a notable trend in investor behavior. He noted

“$GBTC getting a ‘second wind’ of outflows…All that and they STILL rank 3rd overall (out of 3,400 ETFs) in annual revenue generated.” 

Amid Blachuna’s remarks, Adam Back, CEO of Blockstream, hinted at a significant influx of institutional capital into Bitcoin ETFs, potentially catalyzing Bitcoin’s price surge. 

With institutional demand on the rise, Back anticipates increased OTC flows to spot markets, further boosting inflows into Bitcoin ETFs.

Remarking on the same, Adam Back, said,

“Consider:
– bankruptcies run out of GBTC in not many days now.
– then we feel $500-$1bil/day ETF buy walls.
– when there’s buy side net flow OTC flow to spot
– ETF sales channels are just warming up. Many not yet setup with training, approvals.
– exchange balances falling”

This indicates that Bitcoin ETFs are yet to be fully priced in, and there’s further potential for growth. 

Bitcoin’s complex price trajectory 

Despite these outflows and the launch of several Bitcoin ETFs, Bitcoin managed to hold its ground, reaching $68,000 following remarks by Federal Chair Jerome Powell on interest rates. 

Thus, the complexity of tracing Bitcoin’s price movements, suggests other factors beyond ETF inflows playing a significant role.

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Ishika is a graduate of Political Science from the University of Delhi. From writing content as a hobby to now pursuing it as a professional career, she has been living and breathing content all her life. Her interests lie in making sure articles are very digestible to a common reader, despite all its technicalities and jargons.
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