Bitcoin ETF Success Amidst Market Turmoil

Bitcoin’s recent price drop is not attributed to the introduction of Bitcoin ETFs, as clarified by Bloomberg ETF analyst Eric Balchunas. Despite hitting a multi-year high of $49,000 on January 11, the subsequent decline of over 18% has raised questions about the impact of the U.S.-based Bitcoin spot ETF launches on the market.

Balchunas, however, views the ETF launches as a remarkable success, asserting that they remain net buyers with a 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,” he communicated on Tuesday.

Pointing fingers at the cryptocurrency community, Balchunas added, “You need to look to your crypto brethren for the culprits. The call is coming from inside the house, holmes.”

The Grayscale Bitcoin Trust (GBTC), the largest U.S. spot Bitcoin fund, faced substantial outflows after transforming into a spot ETF. Pre-conversion, GBTC shares traded at a significant discount to Grayscale’s underlying Bitcoin holdings, reaching over 40% early last year. Savvy investors capitalized on this discount, profiting significantly when GBTC returned to parity post-ETF conversion.

Now, many early buyers, including those impacted by the FTX bankruptcy, are opting to cash out. On Monday, Grayscale experienced its largest daily outflow ever at $640 million, surpassing combined inflows to all other U.S. Bitcoin ETFs at $553 million.

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