bitcoin spot ETFs have recently become a hot topic due to high levels of inflows into the market. According btc-spot” target=”_blank”>SoSoValue dataThese ETFs have attracted more than $5 billion in investments over the past three weeks, coinciding with an impressive bitcoin price rally of more than 23%. However, amid this euphoria, macroinvestment researcher Jim Bianco says that these spot ETFs have not contributed to significant growth in the bitcoin market.
bitcoin Spot ETFs Make No New Money, Just Recycled Investments
in a x.com/biancoresearch/status/1852699035527684452″ target=”_blank”>series of publications On November 2, Bianco claimed that bitcoin Spot ETFs, despite their impressive inflow record, are not attracting new investments into the underlying asset. First of all, the analyst applauds the performance of these institutional funds, some of which rank as the best-performing ETFs of 2024 after their launch in January.
However, Bianco highlights that btc has failed to surpass its all-time high value of 73,750 set eight months ago despite bitcoin Spot ETFs accumulating over $12 billion in inflows from btc in the same period.
Instead of being less than 4% below its ATH, the analyst explained that such high inflows should have since pushed the top cryptocurrency past the $100,000 mark, especially considering other positive indicators such as interest rate cuts. the Fed, the halving and the public support of the Republican presidential candidate. Donald Trump.
For context, Bianco references gold ETFs with a record over $6 billion in inflows since March 13, resulting in a 25% increase in the market price of gold during that period. The market analyst posits that this price growth can be attributed to “new money” flowing into gold ETFs. However, recycled funds transferred from on-chain wallets or centralized exchanges account for the majority of investments in bitcoin Spot ETFs.
Jim Bianco backs up this theory with a report from Coinbase CFO Alesia Haas that highlighted a decline in the exchange's retail bitcoin traders in recent months. Furthermore, it also points out the average Spot btc ETF trade of $16,000 compared to the average Gold ETF trade of $72,000, which is consistent with the investments of institutions and wealth managers.
In conclusion, Jim Bianco claims that bitcoin Spot ETFs are not attracting any “new money” but simply circulating existing investments in bitcoin, which he describes as a worrying trend that may give traditional financial institutions (TradFi) more influence on the cryptocurrency market than compared to The spirit of decentralization.
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Bloomberg Analyst Responds to btc ETF Criticism
Popular Bloomberg ETF analyst Eric Balchunas has x.com/EricBalchunas/status/1852724733365702670″ target=”_blank”>issued a strong rebuttal to Bianco's view on bitcoin Spot ETFs, which he describes as simply “mental gymnastics.” Balchunas has praised the performance of these ETFs which he believes have played a crucial role in driving the price of bitcoin from $35,000 in January to the current market price of almost $70,000. Bloomberg analyst describes bitcoin Spot ETFs as “powerful” due to their low cost, high liquidity and association with an established brand and advises against betting against them.
At the time of writing this article, btc. It continues to trade at $68,100, reflecting a 2.55% decline in the last 24 hours.
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Featured image from Blockzeit, Tradingview chart
