- Bitcoin exchange-traded funds eked out positive inflows last month.
- BlackRock’s IBIT is in the top 1% of all ETFs year-to-date.
- It’s “impressive and helps explain why Bitcoin’s price has been so stable,” said Bloomberg ETF expert, Eric Balchunas.
Wall Street is doing what nobody thought possible: stabilise Bitcoin’s price — by crypto standards, at least.
Bitcoin exchange-traded funds took in $131 million over the past month, according to Bloomberg’s Eric Balchunas.
The group is led by BlackRock, which, thanks to its $2.4 billion in inflows, enjoys a spot in the top 1% among all ETFs this year.
These figures have helped Bitcoin stay afloat amid a turbulent trade war set off by Donald Trump against major trading partners. While capital markets have been walloped, Bitcoin has remained surprisingly stable, at least in recent weeks.
The top cryptocurrency trades for $84,800 — a 6.6% jump in the past seven days. Meanwhile, traditional equities have dropped 3% to 5%.
It’s “impressive,” said Eric Balchunas on social media on Thursday. ETF flows “help explain why Bitcoin’s price has been relatively stable: because its owners are more stable!”
Is it too soon to say that Bitcoin’s market dynamics are experiencing a fundamental shift? Before the arrival of institutional investors like BlackRock, the market would be prone to panic selling during any bout of bad news.
Nowadays, resiliency is the name of the game.
“ETF investors are much stronger hands than most think,” Balchunas said.
According to Dune Analytics, Bitcoin ETFs hold more than $93 billion in their coffers, and account for more than 5.5% of Bitcoin’s total supply. Another large player is Michael Saylor’s Strategy. His firm holds 582,185 Bitcoin worth $44 billion.
That Wall Street has a more patient profile than crypto-native investors is something that Balchunas has been banging his drum about for some time.
This time, he isn’t alone in saying it.
“This cycle we do not appear to have seen a massive influx of unsophisticated retail investors,” said Bitcoin analyst James Check, in his Thursday newsletter, Checkonchain.
‘Tourists’
Who is selling to BlackRock and Saylor?
When Bitcoin ETFs went live in January 2024, investors in Grayscale’s GBTC were quick to offload their shares in droves. ETFs were there to pick them up.
“For the past 15 months, ”ETFs and Saylor have been buying up all ‘dumps’ from the tourists, FTX refugees, GBTC discounters, legal unlocks, government confiscations and Lord knows who else,” said Balchunas.
FTX refugees likely mean those that managed to get their funds out, but were burned badly by the Sam Bankman-Fried scandal. So much so that they exited the market. Creditors of the now-defunct exchange are preparing to receive payouts in late May.
The dumps, however, are welcome for Balchunas — as long as they’re picked up by these deep-pocketed entities.
“[ETF investors] *should* increase stability and lower volatility and correlation long term.”
Chaos every day
To be sure, it’s not all rosy for Bitcoin.
Scant network activity has led to a fierce debate between Bitcoin champions Jack Dorsey and Michael Saylor over what some consider an existential threat. Dorsey said that if the network stays on its current trajectory “it will fail.”
And American Bitcoin miners, which are the keepers of network security, are living through tough times as their profitability dwindles.
“It’s literally chaos every day,” Nick Hansen, CEO of mining outlet Luxor previously told DL News.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at [email protected].
