Analyst Expressed Concerns Over Bitcoin’s Price Action Despite ETF Inflows
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Jim Bianco, a financial analyst, in a series of posts on X, has expressed his concerns about Bitcoin’s price remaining stagnant despite record inflows into Bitcoin spot ETFs. Bianco noted that while Bitcoin has seen inflows exceeding $12 billion since its all-time high in March, the price remains down 4%.
2/6
Why isn't the price going up? (orange)
Since the BTC ATH on March 13 ($74.3k):
* Spot BTC ETFs flows >$12B (blue)
* The halving (April 19)
* Trump endorsement (July)
* Tech/SPX mania
* Fed Cut (Sept)
The price should have hit $100k months ago.
Instead, it's down 4%. pic.twitter.com/5UnyUjlcmi
He stressed that, historically, factors like the recent halving, increased institutional involvement, and growing interest in digital assets should have driven Bitcoin’s price to new highs, yet the cryptocurrency has lagged behind traditional assets like gold.
Gold VS BitcoinHe noted that at the same time, money has been pouring into gold ETFs over $6B since March 13. And Gold’s price is screaming higher, up 25%. “Why is gold soaring when BTC cannot go up despite an almost never-ending stream of bullish news?”, he questioned.
He noted that the answer is quite simple. Gold flows are $6B of mostly new money, while BTC’s $12B flows are mostly on-chain or centralized exchange money and not new money.
He also compared the size of the trades. He shared that the average gold ETF trade is $72k, Consistent with wealth manager allocation and institutions. And Spot BTC ETF trades are only $16k. He believes that this seems to be money shifting from former Coinbase retail accounts to the ETF, and hence not new money.
ETF’s Not Attracting New Money?He has emphasized that the ETFs are not attracting new money and are not the gateway to get boomers on-chain. “Instead, they are sucking money back into Tradfi accounts. It comes from Coinbase, Kraken, Gemini, hot wallets, and cold storage. No one cares about owning their own keys.”
“So, the more glowing posts I see about massive inflows without new price highs, the more I worry that this is not good for crypto’s future,” he expressed. He noted that Since October 10th, flows into the Spot BTC ETFs have been worth $5.6 billion (blue). “This is massive, and the price is up 14% over this short period (orange).”
Eric Balchunas Holds Differing ViewsHowever, Bloomberg analyst Eric Balchunas has contrasted Bianco’s argument. He stated that even though the Bitcoin price growth is not as substantial as was anticipated by the investors, still the Bitcoin ETFs are positively impacting the asset. He also noted that Bitcoin has doubled in price since Blackrock’s ETF filing in early 2023 inspite of major market disruptions and several significant dumps.
Exactly. Keep it simple: Bitcoin was $35k (and in the reputational doghouse thx to SBFraud) 16mo ago when BlackRock filed for ETF. Since then it’s up to $70k and running circles around every asset class despite limited catalysts and several significant “dumps”. Everyone can see… https://t.co/VfMo9ZUA3i
— Eric Balchunas (@EricBalchunas) November 2, 2024He has also accredited some of Bitcoin’s resilience and current stability to the accessibility and low-cost structure of these ETFs. This has provided a regulated gateway for investors who were previously unsure of entering the crypto space.
He also disregarded the concept that Bitcoin’s price should be significantly higher by now, as he remarked that while ETFs are powerful tools, that does not necessarily lead to rapid price surges. He also highlighted that the existence of brand-name ETFs like BlackRock could provide long-term advantages for Bitcoin’s mainstream adoption, even the while short-term price movement remains calm.
Experts believe that Bitcoin’s fundamentals remain strong. BlackRock CEO Larry Fink has recently voiced his optimism about Bitcoin’s future stating- “The long-term viability of Bitcoin is solid,” Nevertheless, as more investors pivot to Bitcoin as a hedge against inflation and fiat currency devaluation, this could lead to its sustainable price growth.