The Spot Bitcoin ETF has become an important part of the entire crypto ecosystem in just four months since it went live in the US financial market.
However, Eric Balchunas, an ETF specialist at Bloomberg, explained that even if we see a noticeable change in short-term flows, we shouldn't get too carried away.
May covers April losses
These products were finally approved by the U.S. Securities and Exchange Commission (SEC) in mid-January, and although they caused confusion and increased volatility at launch, they pushed BTC prices to new all-time highs in just two months. This happened at a time when his ETFs except for Grayscale's GBTC were attracting large inflows.
However, the trend started to change several times in March, but especially in late April and early May. In fact, it was negative for seven consecutive days from April 24, when outflows surged to more than $1.2 billion, to May 2.
As expected, Bitcoin's price fell during this period, dropping to a multi-month low below $57,000. But those dark days are behind us, and over the past week or so, huge amounts of money have started flowing into ETFs.
Additionally, Eric Balciunas claims that May's $1.3 billion inflow covered all of the losses seen in April, which is likely why BTC price has risen by about 10 grand and is currently at $67,000. That's probably why I stayed.
don't be too emotional
Latest US SEC filings reveal a number of large companies are entering the Bitcoin ETF market, including Morgan Stanley, Wisconsin State Investment Board (SWIB), and Bracebridge Capital However, these products also attract a specific group of retail investors. They tend to make emotional decisions about when to buy or sell assets.
Balciunas therefore warned people to put their emotions aside, as these inflows and outflows are just “part of the life of an ETF.” He believes it will be a net positive in the long run, and with more than $12 billion already poured into it, that now appears to be the case.
