Bloomberg: Don’t Blame Bitcoin ETFs For Crypto Market Dump – Here’s the Latest
Bitcoin ETFs are not to blame for Bitcoin (BTC)’s seismic price drop this month, according to Bloomberg ETF analyst Eric Balchunas.
Tapping a fresh multi-year high of $49,000 on January 11, the launch of several U.S.-based Bitcoin spot ETFs that same day has appeared to mark a definitive local top for the asset, which is down over 18% since.
Yet Balchunas maintains that the launch of these ETFs has been a phenomenal success, and has still had a net positive impact on price action.
“Even with GBTC, ETFs [are] still net buyers of +$1 billion since “dumping” began, so it would be worse without them,” wrote Balchunas to X on Tuesday.
“You need to look to your crypto brethren for the culprits,” he added. “The call is coming from inside the house holmes.”
The Grayscale Bitcoin Trust (GBTC) – the largest and longest-standing of U.S. spot Bitcoin funds – has suffered billions of dollars in outflows since successfully converting into a spot ETF.
Before conversion, shares of GBTC traded at a significant discount to Grayscale’s underlying Bitcoin holdings, growing larger than 40% early last year.
Many savvy investors took advantage of that discount by buying into GBTC early and recorded a massive profit when it was restored to parity after the fund became an ETF.
Now many of those buyers – including the FTX bankruptcy – have chosen to cash out. On Monday, Grayscale suffered its largest daily outflow ever at $640 million, outsizing inflows to all other U.S. Bitcoin ETFs combined at $553 million.
Nevertheless, net flows to all such ETFs remain at $1.07 billion over their first seven trading days.
Even when factoring in outflows from other Bitcoin ETF products like ProShares, Purpose, and European ETPs, funds have earned a respectable $721
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