here’s why he is wrong

Bitcoin’s post-halving consolidation has sparked sarcastic rhetoric from popular crypto critic Peter Schiff.

Bitcoin (BTC) skeptic Peter Schiff has suggested that the value proposition driving spot BTC ETF demand could quickly diminish, contradicting expert forecasts and market performance so far. BTC has grown over 55% year-to-date (YTD), but Schiff noted that the token has traded sideways for more than three months, posting very small gains for spot Bitcoin ETF investors.

BTC price movement in the last three months | Source: IntoTheBlock

Funds traded on the spot exchange track the price of the underlying asset. In this case, the asset is BTC and the profit depends on increases in the price of the cryptocurrency.

Schiff’s statement about BTC’s sideways price patterns may be accurate, but the claim may be missing context. Bitcoin is up nearly 70% since the U.S. Securities and Exchange Commission (SEC) approved spot BTC ETFs.

Additionally, Bitcoin’s multi-week post-halving consolidation is not new. The asset has moved from an accumulation phase to a parabolic rise over at least the last two cycles.

BTC post-halving progress | Source: IntoTheBlock Growing institutional Bitcoin demand

BlackRock and Fidelity’s respective spot BTC ETFs have had their best debuts on Wall Street in more than 30 years. Within weeks, both funds had accumulated over $10 billion in assets under management (AUM). Despite billions of dollars in demand, Schiff examined Bitcoin’s bullish thesis and price progress. “If ETF investors are buying, who is selling and why?”

Meanwhile, Bloomberg’s ETF expert Eric Balchunas has repeatedly mentioned the flow of capital from futures ETFs to spot BTC funds. The change in the dynamics of the halving has also witnessed some selling by crypto miners to preserve their cash reserves.

I’ve said it before and I’ll say it again, the call is coming from inside Holmes’ house. This isn’t something ETFs are doing, of course they’ve been buying like crazy lately, bitcoin holders selling or leveraging siphons or whatever. ETFs are in flux time and time again and meet… https://t.co/iuGNayrLgd

— Eric Balchunas (@EricBalchunas) June 6, 2024

However, on-chain data showed that Bitcoin balances on centralized exchanges reached a four-year low; This means spot holders are not selling, but rather holding on for dear life, commonly known as “hodling” in the digital asset industry.

Schiff predicted that as the asset continues in its consolidation range, ETF buyers may tire of waiting and begin liquidating shares. While the scenario remains a possibility, increasing corporate demand suggests otherwise.

Organizations like the Wisconsin Board of Investment have parked hundreds of millions of dollars in spot BTC ETFs, likely with a long-term perspective considering the asset’s growth over the years.

BTC is up over 145% in the last year. By comparison, the S&P 500 has returned 85% over the past five years, strengthening the reward argument for investing in the best cryptocurrency by market cap. Additionally, IntoTheBlock data showed that more than 80% of BTC buyers made a profit.

BTC profit data | Source: IntoTheBlock

Balchunas and other experts also noted that major institutions have not yet entered the BTC ETF scene. But the market is strong at over $40 billion and growing. As cryptocurrency adoption soars and analysts expect the global ETF market to nearly triple to a $35 trillion market by 2035, the bullish thesis behind Bitcoin’s rise is arguably stronger than ever.

The fact that Bitcoin has permeated discussions on such television shows says a lot about the accessibility and scope that ETFs bring to the asset class. And it hasn’t even been six months yet.

— Eric Balchunas (@EricBalchunas) June 3, 2024