Spot Bitcoin ETFs have become a hot topic recently due to the high levels of market penetration. According to data from SoSoValue, these ETFs have attracted more than $5 billion in capital over the past three weeks alongside an impressive Bitcoin price rally of more than 23%. However, amid this excitement, investment analyst Jim Bianco says that these Spot ETFs have not contributed to significant growth in the Bitcoin market.
Spot Bitcoin ETFs Do Not Include New Funds, Only Reinvested
In a series of X posts on November 2, Bianco called for Spot Bitcoin ETFs despite their impressive entry record not attracting any new investment in the underlying asset. First, Analyst applauded the performance of these institutional funds, some of which were ranked as the best performing ETFs of 2024 following their launch in January.
However, Bianco highlights BTC has failed to surpass its all-time high of 73,750 set eight months ago despite Spot Bitcoin ETFs accumulating more than $12 billion from BTC during the same period.
Rather than being less than 4% down on its ATH, the analyst explained that such a high entry should have since pushed the premier cryptocurrency above the $100,000 mark especially considering other positive indicators such as Fed rate cuts, declines, and approvals of the public is a candidate for the President of the Republic. Donald Trump.
In context, Bianco is referring to Gold ETFs with record inflows of more than $6 billion as of March 13, resulting in a 25% increase in the market price of gold during that period. A market analyst posits that this price increase can be attributed to “new money” flowing into Gold ETFs. However, recycled funds have shifted from on-chain wallets or exchange accounts to a major investment in Spot Bitcoin ETFs.
Jim Bianco backs up this view with a report from Coinbase CFO Alesia Haas that highlighted the decline in retail bitcoin exchanges over the past few months. In addition, he also points to the Spot BTC ETF trading average of $16,000 compared to the Gold ETF trading average of $72,000 which is consistent with investments from wealth managers and institutions.
In conclusion, Jim Bianco says that Spot Bitcoin ETFs do not attract “new money” but simply spread existing investments in Bitcoin, which he describes as a trend that may give traditional financial institutions (TradFi) more influence in the crypto market. the ethos of decentralization.
Bloomberg Analyst Fires Back on Criticism of BTC ETF
Prominent Bloomberg ETF analyst Eric Balchunas issued a strong objection to Bianco’s take on Spot Bitcoin ETFs which he described as mere “mental gymnastics”. Balchunas praised the performance of these ETFs which he believes played a key role in driving the price of Bitcoin from $35,000 in January to a market value of nearly $70,000. A Bloomberg analyst describes Spot Bitcoin ETFs as “powerful” because of their low costs, high liquidity, and association with an established brand name and advises against betting against them.
At the time of writing, BTC. continues to trade at $68,100 showing a 2.55% decrease in the last 24 hours.
Featured image from Blockzeit, chart from Tradingview
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