Bitcoin Can’t Grow Without Spot Bitcoin ETFs: Report
Spot Bitcoin ETFs were the main catalyst driving BTC to all-time highs just months before the fourth halving. Bitcoin can no longer grow without these products, according to a new report from Ecoinometrics.
These funds appear to have ‘stopped accumulating coins’ (collectively) for over a month, which could be cause for concern about the future price trajectory of leading assets.
Bitcoin’s growth depends on ETFs
From January to mid-March, the spot Bitcoin ETF accumulated 200,000 BTC despite significant outflows from Grayscale. This accumulation coincided with a surge in the price of Bitcoin from $40,000 to $75,000.
However, as BTC inflows into the ETF stopped, the price movement also stopped.
The report stated:
“If you’re wondering why Bitcoin is stuck in the $60,000 range, look no further. ETFs have stopped accumulating coins for some time. They are the only game in town. No demand from them means no price increases.”
Despite no action over the past 30 days, econometrics says investors should not lose sight of the big picture. The report states that Bitcoin is the only hedge investors need against a decline in value.
The best option for falling Bitcoin value?
Analyzing the performance of Bitcoin, gold and Nasdaq over the past decade adjusted for the growth of the global monetary base, the report found that despite the yellow metal hitting new all-time highs, it has stagnated, only keeping pace with global liquidity. I found that it maintains . This represents the baseline level of hedging against decline in value.
On the other hand, NASDAQ has risen three times, which is commendable. However, Bitcoin significantly outperforms both, boasting an incredible 44x increase in value. This highlighted Bitcoin’s effectiveness as a hedge in today’s economic environment.
However, prominent industry experts also have certain counter-arguments. Cryptocurrency analysis platform Kaiko said Bitcoin had failed to attract safe-haven flows despite increased demand for it due to conflict in the Middle East.
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