In just three days, the trading volume of 11 newly launched Bitcoin spot ETFs reached nearly $10 billion, surpassing the total turnover of 500 ETFs for various assets in 2023. ETF market analyst James Steffart and colleague Eric Balchunas at Bloomberg find these figures astonishing, underscoring their authenticity driven by market actions.
Comparatively, within the same timeframe, Grayscale’s Bitcoin ETF neared $5 billion, BlackRock’s fund achieved $2 billion, and Fidelity Investments’ fund secured $1.5 billion. Balchunas emphasizes the organic nature of these figures, not subject to artificial inflation.
Bitcoin’s price has exhibited stability around $42.6 thousand, despite a recent decline. Since the ETF launch, there’s been a nearly 10% decrease in Bitcoin’s price, revealing an intriguing trend in its movement.
While the exact details of Bitcoin purchases by these funds remain unclear, it’s confirmed that the $10 billion did not enter centralized exchanges. Real bitcoins flowed from prominent wallets on platforms like Coinbase, Binance, and Bitfinex, including MicroStrategy’s Michael Saylor’s wallet.
Ordinarily, a Tether issuance of one billion led to a 3-5% BTC price increase. However, in this instance, the injection of $10 billion into the market coincided with a price decrease, challenging conventional expectations. Gary Gensler’s skepticism about the hype surrounding Bitcoin ETFs appears justified, as the market experiences an influx of seemingly inconsequential paper surrogates affecting the cryptocurrency’s price.
This development represents a new phase in mitigating market influence on Bitcoin’s price, following the introduction of Bitcoin futures on CME. With the market flooded with paper Bitcoin, its price becomes easily manipulable, marking a shift in the cryptocurrency landscape.