ETFs
Bitcoin ETF Fund Inflows Indicate Lower Long-Term Volatility
Bitcoin ETFs have seen increasing inflows after days of low sentiment due to macroeconomic and sectoral factors. This year, Bitcoin products have attracted institutional investors, with billions of dollars being invested across eleven funds. Experts have estimated that these flows, coupled with the current state of the market, will make Bitcoin less volatile in the long term.
Bitcoin ETF Makes Bitcoin Less Volatile
A new Bloomberg The report shows how Bitcoin ETFs have reduced the asset’s volatility since the products were launched. The US approved Bitcoin spot ETFs in January and subsequent capital inflows pushed the asset’s price to a new all-time high above $73,000. While corrections are being recorded, these capital inflows and institutional buying are reducing the asset’s volatility.
Richard Galvin, co-founder of DACM, said that institutional buying boosted by the approval of spot Bitcoin ETFs will reduce volatility. Historically, Bitcoin’s fluctuations have fallen, even as it has remained higher than gold and other assets. This is reflected in the 180-day metrics of financial assets, among other factors.
Charlie Morris, an executive at ByteTree Asset Management, added that Bitcoin has seen an increase in value buyers who are helping to reduce volatility by pointing to institutional investors.
“Whenever the price of gold falls, many value buyers, such as bullion dealers, jewelers and central banks, enthusiastically buy the dip.”
This volatility also appeals to traders and remains very far from this objective compared to other financial assets.
Bitcoin Price Wavers
Last week, Bitcoin opened with reduced sentiments due to Mount Gox creditor repayments and German government sales. These events have plunged the asset below the $54,000 market, although a rebound has boosted sentiment. At press time, BTC is trading at $58,625, up 1.6% in the last 24 hours. Similarly, altcoins and meme tokens have also seen inflows over the same period. Bitcoin ETFs have attracted over $50 billion and account for over 4% of Bitcoin’s supply. Analysts also tip institutional demand toward Spot ETF as a catalyst for a market recovery.
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David is a financial news contributor with 4 years of experience in Blockchain technology and cryptocurrencies. He is interested in emerging technologies and has an eye for breaking news. Staying abreast of trends, David has reported on several niches including regulation, partnerships, crypto assets, stocks, NFTs, and more. Outside of financial markets, David enjoys cycling and horse riding.