Topic: U.S Bitcoin Spot ETF hits a total net inflow of $1.01 billion in this week. (Read 281 times)

supply and demand is the silly lessons that are taught in highschool.. real economics of trading goes alot deeper and broader then that and has many other factors involved
for instance there are market manipulators that do arbitraging to set walls of resistance and support to keep the price in a narrow window range no matter the supply or demand of real trade

for instance the whales when they have their sell order of BTC sold for USD, they instantly use that USD to buy ETH and then instantly sell ETH for BTC to then put the same funds back as a BTC sell order. thus creating a wall that can never be penetrated because the order price refills with coin, so no matter how many buyers there are, the sell wall resists being emptied to allow the price to go higher

whats also worth noting is that although there is like 2m+ coins in CEX's combined spread over a dozen CEX, meaning each cex has ~150k coin average.. the actual order lines of a market order book are not filled with thousands of coins per line. most order lines near the purchase price that change a price by a few dollars are only 0.01btc or less. meaning the real 'trade' participation per second is small amounts and so its the whale wall support and resistance orders at the window edge that control if the price will pass a certain amount(as explained initially)

further to note. when one exchange sees a significant move, the others respond to take advantage and arbritrage across the exchanges using stable coins to balance out the btc/usd of each other which is why all exchanges stay inline with each other

so basically although you think there is XX trade volume of real supply/demand trading. its only about 10% real supply/demand. the rest is techniques to control the price and balance out the differences between exchanges to keep the price inline

whales only cancel the wall orders to allow free-flow of coin to move the price when whales want it to..
most of the time they do it when they had their fill of buys and then want the price to increaseso they can then sell for profit. this happened alot in the 'futures options' days of 2019-2023(before ETF's) but now the energy of the futures has decreased and now the whales seem to control the price to stop it going over $75k so they can buy cheap and hoard for ETF before next years free flow to a new super ATH

Impacts on price are not good as expected but total capital spent in Bitcoin market through Bitcoin Spot ETFs are already bigger than predictions before these Spot ETF approvals.

I can not be sure about future but by believing in Supply and Demand Principle, and with very possible positive impacts of Bitcoin Spot ETFs on capital inflow for Bitcoin market, I see soon price will grow up. It needs time for warm up and people who are hesitating will need lot of time to consider, ignore, then regret about their missing chances.

When impacts are triggered and big, price will not look back $60,000 range, but it won't be only because of Bitcoin Spot ETFs.

I think it is completely pointless to go all the way to the beginning to try to explain some things today, because then only a few knew that BTC existed, and I dare to say that few among them could in their wildest dreams predict what would happen in 10 or 15 years. I therefore think that it is still too early to say what impact spot BTC ETFs will have on the price, because it is no secret that the beginning was explosive, but today we have a situation where Saylor buys BTC for $1+ billion, while at the same time all spot ETFs buy together less or equal.

Therefore, I think that spot ETFs have not even come close to justifying the great expectations that existed, and only time will show how significant a factor these funds will be when it comes to influencing the price.

well there are many games that can be played
firstly. lets say each share was pegged to 5000 sats initially, each year the shares are then losing sats due to the fee of the etf. meaning although the etf still hoards the real coin, each share loses sat value meaning if they had 100000 shares of 5000sat (5.00000000btc total) next year if the fee was 2% the etf would still own 5btc, but can either just not declare 0.10000000 as locked for shares... or they could create a further 2000 shares meaning the shares allocation goes from 100000 to 102000.. but in both cases each share is only pegged to 4900sat and then price compared to that sat amount

secondly an etf can do a share dilution and just decide one day that instead of a share being 5000sat peg.. they can just make official notice to want to double the shares and make each share only pegged to 2500sat and only offer certain certified level of investers a offer to double their shares to stay on-par, whilst everyone else has their share holdings halved in price..

the only reason people would want to buy ETF shares instead of real btc, is because they are using pre-tax income from employer to be put into a pension fund and the pension fund then exposes the pension value at a pretax buy price thus saving them 20-40% upfront(getting 20-40% more shares than the pegged sat amount). where as us normies have to pay tax first then get our salary and then buy real bitcoin at real ask price on an actual CEX, but then we normies actually own the real coin which cant be sat diluted by middlemen.. (as long as we hoard and not move the coin and lose sats via mining fee)

yes by these share investors holding shares and not real coin, they are not then using income to buy real coin. thus taking away buy pressure from the real market directly/individually. but then again by the demand of shares(if no share dilution occurs) the etf will then use the share income to buy more coin to offer more shares. so as long as a etf does not dilute the shares peg, and instead when selling shares they buy more coin. then it balances out. and due to etf offering being a new investment sector for pension plans, it can actually drive more buy pressure of the underlying coin via the etf.. but at this moment most eft are not buying new fresh coin from circulation. but just moving coin from one etf to the other (grayscale losing its hoard and blackrock taking that coin)

Thank you for that deeper explanation. It definitely has a "diluted" feel to it compared to direct ownership in a wallet. But I guess that's what the clients actually want. I still hope the reindeer games between the shares/ valuation and what the ETF holds don't get out of hand.

share holders are not treated as btc holders. they dont own btc.. so its not like a double spend of the same btc, so its not like the ETF facility owns the coin and the share holder owns the same coin

the share holders only own a share of the trust brand. and the trust brand owns the coin, even if the coin is not held by the etf trust brand, but held in a custodian..

share holders are not taking ownership of coin. they are instead just exposed to the trusts accountants say of the balance of price exposure of the trusts value based on the price of the coins

so its only about price exposure where by if btc price increases the trusts brands valuation increases and the shares then increase in their valuation

I've had many questions about how the ETF products are made. If they are offering shares of the ETFs against the actual value of bitcoin. What prevents them from stagnating the market by creating an endless rabbit hole for institutional money? while i'm sure they have to purchase spot bitcoin in order to facilitate their product, the shares vs btc issue bothers me as we all know it softens the hard cap at least from this angle.

thoughts?

There will always be an increase in cryptocurrency adoption rate in every country where the government acknowledges Bitcoin and also supports it ETF. However, this daily net inflow into the ETFs shows most of the rookies are still naive about the disadvantages of ETF investment and the benefits of having their BTC in a self-custodial wallet.

The long term trend is important and if it is up, it's good. Like Bitcoin price goes up since 2009 but in each week, month, price looks not to be safe for many people. They see it is very volatile and risky but if they see the chart with yearly candles, they can see different things.

https://charts.bitbo.io/yearly-candles/

It is volatile but looks to be less risky. I see similar with effects of Bitcoin Spot ETFs, short term it can be wildly up or down but long term, the trend will be up seriously.

Well this is good for the asset management company. If ETF wasn't available and if the government had allowed investment on Bitcoin as cash equivalents, this money would have flown directly into the Bitcoin market. But due to ETF, companies are investing in it and not into the crypto market directly. It's a loss for us as the capital inflow is redirected to a middleman in literal sense.

ETF only makes the asset managers and the government happy. The actual market is loosing liquidity.

The recent $360+ million net inflow into US-based Bitcoin ETFs, though indicative of growing interest, is not really a sign of increased adoption across the country. Large inflows from institutional investors such as BlackRock, Ark, and Fidelity-fund giants driving this spike. So, it would appear that this has more to do with large-player strategic positioning than widespread main street adoption. The inflows were part of a trend that had been building through this year, not a one-off event. Government effects do exist, some regulations will reassure confidence in Bitcoin ETFs, but growth does look more driven by market conditions and institutional strategy. It is not the only driving force from the government side. While the institutional interest in it is high, that doesn't necessarily mean the entire population of the U.S. started adopting Bitcoin at an increasingly higher rate.

The increment interests in the Bitcoin ETF is all pointed at the base of investment rate which speculations or SECs approval of an ETF is an attribute where investors advances to increase their investment portfolios and also given attraction of more investors to embrace the market.

So looking at it this aspect, it should be understood that the increase is only possible when there are more demands to buy much more than those wanting to sell. So, the total accumulating of funds in the blockchain surges increasingly too.

I would not put the credit towards US govt. While there are ETFs now of cryptocurrencies particularly bitcoin and ethereum, I do not think they have made a lot of supportive steps forward about crypto. SEC is constantly breathing down the necks of crypto companies and platforms so it is easy to think that this can't be good for the image of crypto.

So this high record of inflow is most likely result of bitcoin's price hiking up bit by bit. We just came from some tough times where bitcoin was valued at lower than 60k so now that we are nearing 70k again I am guessing many people are wanting to get into bitcoin before it hits its new ath.

Cutting rates has its own effect (probably it will look better in the long term), but if we look at the inflows/outflows since the beginning of the approval of BTC spot ETFs, we see that such inflows are not always connected with good news - because I don't remember that in July there was a reason for such inflows.

However, it seems that today we have significant outflows considering that the price is dropping.

The global economy is highly interconnected. You might be correct, this proposed policy by the Chinese government might have a ripple effect on the market. Investors will consider investing in risky assets like Bitcoin. I also think that the US interest rate cut also played a significant influence on the market. Interest rate cuts lead to cheap borrowing, more job creation, and economic growth stimulation. Hence we expect people to start investing in diverse areas like the crypto sector in the US. However, I am concerned that the conflict in the Middle East might slow down the crypto industry.

These companies with Bitcoin Spot ETFs buy bitcoins to mint their shares which are sold to their customers. Holding or not, it's up to their customers and if customers want to sell, these companies will sell bitcoin on behalf of customers.

At the end, these companies get revenue from their service fees and there is service fee race among Bitcoin Spot ETFs in the USA. Grayscale did not want to reduce their service fee so there were massive withdraws from Grayscale in first months after Bitcoin Spot ETF approval in January 2024.

https://blockworks.co/bitcoin-etf

These companies can invest their money in bitcoin, but this part is different from what they are holding as equivalence of Bitcoin Spot ETF shares.

If you refer to trading companies only as Hedge Funds you may be right but the rest of the companies if they buy bitcoin will be to have it in their reserves and that does not mean buying today to sell tomorrow, and less with the volatility it has. In addition, if they study the subject a little, selling the most profitable asset, no matter how volatile it is, does not make much sense.

For my part, I hope that it will be noticed in the price, we are only a few sessions away from the ATH if it starts a good rise.

I think this is probably because there's been some chatter that China is making some major moves to improve their economy and will be splashing plenty of money into their markets in the process. If that's the case, the expectation is that risk assets (like Bitcoin) will get plenty of action and US seem very likely to go band for band with China. The ETFs have been getting plenty of inflows since that 50 BPS rate cuts earlier this month.

This is a small number compared to what US bitcoin ETFs have contributed to the market. So far, more than $60 billion has flowed into the market through bitcoin ETFs in just a few short months. This shows their influence on the bitcoin market but many people still stubbornly believe that the government will not be able to influence the development of bitcoin. It is true that bitcoin can continue to exist without the US market but I do not believe it can grow strongly without the participation of the US market.

The government is intervening more in the market but without that intervention or without their permission, I don't think mass adoption of bitcoin can happen quickly. That's also the price we have to pay if we want bitcoin to become globally popular.



https://www.coinglass.com/bitcoin-etf

The US spot Bitcoin ETF market has surged in demand following the Federal Reserve's rate cuts along with BlackRock increasing BTC holdings.

Institutional demand for Bitcoin ETFs remains strong, significantly outpacing daily BTC production.
BlackRock has aggressively increased its Bitcoin holdings, reporting 198,874 shares of its spot Bitcoin ETF (IBIT).
This strong demand of ETF sets the stage for a BTC price bull run in Q4 2024.

https://coingape.com/spot-bitcoin-etf-inflows-cross-1-billion-this-week-blackrock-buys-ibit/

yes they dont sell coin, they just hold it. but that means there is a inflow gain and not much outflow loss of hoarding

once blackrock sell their creation of shares to secondary managers like robinhood/etoro.. blackrock BUY more coin to create more shares
this means coins have to come from somewhere

when people pay into a pension they are buying and hoarding shares of something. so each month new shares are needed or traded.. thus as long as the demand for shares keeps up the demand for coin keeps up


normally smart people buy the bear(dip) and sell the bull(pump)
you know ,, buy low sell high

however ETF do buy low they wont be doing much selling, they instead are a net flow of buy and hoard (inflow and accumulate)

Yes it doesn't really have an effect like normal buying and selling.
Even in a Bear market they wouldn't sell instead they would slow down accumulation or stop accumulating until demand picks up.
They become like a stabilizing force, they wouldn't add to the sell pressure during a Bear but would add to the buy pressure during a Bull market as more investor would want to get Bitcoin through ETF.

Which literary has no effect on bitcoin price. So which means Blackrock and others that have the bitcoin ETFs may not sell bitcoin even if the bear market is very significant? They just hold it and not buy more at the time until the next bull run? I guess that is how it would be. Very bad.

locking coin to custodian to declare shares means they sell shares to customers for fiat and then use fiat to buy more btc to lock more coin

This would be good if they will invest again. Although, as bitcoin marketcap is increasing, the volatility is reducing. But if bitcoin can get to over $100 thousand and latter fall during bear market to like $30000. This will give another investment opportunity of buying bitcoin at lower price again. It means the ETF may not affect the speculative value of bitcoin.

the ETF inflows are about how much the ETF trusts are accumulating..

its literally in the title ... ETF   ...      inflow

..and yes they are hoarding.
as they are locking up that coin(with a custodian) to then register asset ownership with regulators to then register shares that the etf can then sell to individuals, businesses(their customers), and then those individuals can then resell to each other whilst the ETF and custodian just hoards the coins whilst individuals play the secondary etf share market for their pension profits

the data shows that for instance blackrock and fidelity combined accumulated 11k btc in last week whilst greyscale main trust sold off(outflow) 820 coin
other ETF trusts had smaller amount of inflows and some had outflows.. but generally a ETF accumulates more coins than it disposes (bar greyscale as the exception)

..
repeated for emphasis
all news of "etf inflows/outflows" are going to be about the ETF trusts themselves..

I first saw this news here, but my first thought was that perhaps the Fed has made its move. From articles I've read, it seems I was right. The Fed lowered the rate by 0.5%, and when the rate gets lowered, investors are motivated to buy shares, the stock market tends to recover. Since Bitcoin ETFs are close in their nature to the stock market, it makes sense that there's been a major inflow of money this week. BTC price is also up by almost 5% over the last 7 days.
It's all good news, but also highly dependent on the Fed.

ETF inflows are from companies and business users, not individuals. That means Bitcoin is getting more popular only with companies, while it's got the same attractiveness to individuals that it had a few months ago.

I am certainly sure that all those companies are not interested in HODLing Bitcoin, but they just want to make a quick buck off of their investment.

This Thursday, the bitcoin exchange traded funds ETFs hit a substantial  daily net inflow of over 360 million dollars making it the largest recorded since late July this year.

Does this mean the USA have increased in its crypto community in terms of its adoption rate or this was due to government effects?