Bitcoin Can’t Grow Without Local Bitcoin ETFs: Report

Spot Bitcoin ETFs have been a major catalyst in pushing BTC to an all-time high months before its fourth halving. According to a new report from Ecoinometrics, Bitcoin cannot grow further without these products.

These funds appear to have “stopped accumulating coins” (as a whole) for over a month, which may be a cause for concern for the future price path of the leading asset.

Bitcoin growth depends on ETFs

From January to mid-March, local Bitcoin ETFs managed to accumulate 200,000 BTC, despite significant exits from Grayscale. This rally coincided with the rise in the price of bitcoin from $40,000 to $75,000.

However, the inflow of BTC into ETFs was halted, resulting in a halt in price movement.

The report said,

“If you’re wondering why bitcoin is stuck in the $60,000 range, look no further. ETFs have stopped accumulating coins for a while now. They’re the only game in town. No demand for them means no price appreciation”.

Despite the lack of action over the past thirty days, Ecoinometrics said investors should not lose sight of the bigger picture. His report further said that bitcoin is the only hedge that investors need against degradation.

Bitcoin’s Best Bet Against Degradation?

Analyzing the performance of bitcoin, gold and the NASDAQ over the past decade, adjusted for growth in the global monetary base, the report found that the yellow metal remains flat, just keeping pace with global liquidity despite reach new historical highs. This represents the basic level of coverage against degradation.

On the other hand, the NASDAQ has experienced a three-fold increase, which is commendable. However, bitcoin has outperformed both by a significant margin, with a staggering 44x increase in value. This highlighted the effectiveness of bitcoin as a hedge in the current economic climate.

However, there are certain counterarguments from prominent industry experts. Crypto analytics platform Kaiko said bitcoin has failed to attract safe-haven flows even in the face of increased demand for these assets amid conflict in the Middle East.

SPECIAL OFFER (Sponsored) LIMITED OFFER 2024 for CryptoPotato readers on Bybit – Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!