Bitcoin traded at $40,300 on Friday afternoon (19th) and is down 18% since ETFs were approved in the US on the 11th. Although Grayscale’s ETF caused outflows of R$10.9 billion (US$2.2 billion), ETFs are not the most villainous in this story.
The reason for mentioning this is related to the other nine ETFs on the market, which together generate an inflow of R$ 16.3 billion (US$ 3.3 billion), that is to say they add to the account R$ 5, 5 billion (US$1.1 billion). in the positive.
On the other hand, miners sold R$23 billion (US$4.7 billion) during the same period, putting pressure on the market. Anyway, these aren’t the only ones that might sell.
Bitcoin ETF balance is positive
With Grayscale’s Bitcoin portfolios going public, many attribute the market crash to this manager. For example, Grayscale sent another 12,865 bitcoins to Coinbase this Friday afternoon (19), indicating that the outflow from its fund continues.
However, many ignore the other nine ETFs on the market. While they still don’t have data for this Friday (19), BlackRock, Fidelity and other managers generated greater inflows than Grayscale’s outflows. As Bloomberg ETF expert Eric Balchunas noted, these ETFs are helping, meaning the decline would be greater without them.
Another reason to believe that Grayscale is not exerting pressure on the market is the timing of these and other managers’ purchases and sales. According to their websites, their funds are updated at 4:00 PM in the US (6:00 PM Brasilia time), the closing time of US stock exchanges.
When analyzing the Bitcoin chart on Coinbase, possibly the main broker where these managers conduct their activities, it becomes clear that there is a volume peak between 5:00 PM and 6:00 PM (BRT). The only days this doesn’t work are Saturdays and Sundays, when ETFs are not trading.
Therefore, price fluctuations during the day have no direct relationship with Grayscale, much less ETFs, because the closing balance is positive.
Miners prepare for halving, traders take profits
With the halving taking place in about 100 days, miners are preparing for ‘cannibalism’ in the industry as their rewards are halved.
Experienced, with years in the market, some are preparing for this moment that could introduce several mergers and acquisitions in the sector. So this explains the sales of R$23 billion (US$4.7 billion) by these companies this week.
Although such a value is enough to make Bitcoin fall, traders can also support this fall. Finally, BlackRock shook the market by announcing that it would attempt to launch the first Bitcoin ETF in history in June 2023.
In other words, whoever bought Bitcoin on the date of this news made a 95% profit in just seven months speculating on ETFs. That is why they are happy that they can now realize part of their profits.
This period also brought some outsiders. For example, even investors who don’t like Bitcoin said they bought it. Their job is to make money for customers, they are not Bitcoin enthusiasts and that may be why they are leaving.
Finally, Bitcoin’s fear and greed index was already close to “extreme greed” even before ETFs were approved. A big sign that the market was too tense. Therefore, this 18% decline is a natural market adjustment.
As for ETFs, they should bring a continuous flow of money into Bitcoin in the long term. In short, we may see the world’s richest market making monthly contributions in perpetuity. There is no way not to have confidence in BTC’s future.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
