Bloomberg Analyst: ETF Investors Buying the Bitcoin Dip
A recent tweet from Bloomberg’s ETF expert, Eric Balchunas, reveals that ETF investors are the “strong hands” behind the recent buying activity in Bitcoin. While Grayscale has seen outflows from its ETF, most of it is attributed to Genesis offloading into spot Bitcoin. Balchunas explains that it is not the ETF investors who are causing the sell pressure but rather other Bitcoin owners.
According to Balchunas, the new generation of ETF investors, often referred to as “boomers,” have historically displayed conviction in their investment strategies and have invested large amounts of capital when prices drop. He cites examples from previous decades where these investors poured billions of dollars into stock market index ETFs during times of market decline.
The Strength of Boomer ETF Investors
Balchunas shares data showing that “boomer” ETF investors have proven to be resilient and tenacious in their investment decisions. Despite market downturns, they continue to allocate substantial amounts of capital into ETFs. For instance:
- In 2008, during a time when the SPY index was down 35%, boomer investors invested $167 billion into ETFs.
- In 2021, when the SPY index was down 18%, boomer investors poured an additional $600 billion into ETFs.
These numbers demonstrate that boomer investors are tougher than one might think. Balchunas suggests that while there may be occasional outflows from these investors, they will likely be minimal and ultimately result in a net positive over time.
ETF Investors as Net Buyers of BTC
Balchunas emphasizes that ETFs have been net buyers of Bitcoin despite the recent dip in price. In fact, the nine new Bitcoin ETFs have attracted approximately $1.2 billion in investments over the past five days, coinciding with an 8% decline in Bitcoin’s price. He also clarifies that any outflows from Grayscale’s GBTC are primarily due to Genesis exchanging GBTC shares for spot BTC, resulting in a net neutral event.
Based on this information, it is evident that ETF investors are not only weathering the storm but also taking advantage of the dip in Bitcoin’s price to increase their holdings.
Bitcoin’s Current Price
As of now, Bitcoin is valued at $64,367.
Hot Take: ETF Investors Driving Bitcoin’s Recovery
The recent buying activity by ETF investors in Bitcoin indicates their confidence and resilience in the face of market volatility. Despite the sell pressure from other Bitcoin owners, these investors have been driving the recovery of Bitcoin’s price. Their historical track record of investing during market downturns suggests that they have the conviction and capital to weather fluctuations and ultimately contribute to a net positive outcome over time.
With ETF investors continuing to buy the dip, it is clear that they are the “strong hands” behind Bitcoin’s recent recovery.
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