Amid recent Bitcoin price fluctuations, exchange-traded funds (ETFs) are showing notable stability. Experts highlight that while investment inflows have slowed, most of the capital remains within the funds.
Capital Retention in Bitcoin ETFs
According to Bloomberg analyst James Seyffart, Bitcoin ETFs have managed to retain over 95% of their invested capital despite inflows dropping to $35 billion from a peak of $40 billion. Even with a 25% decline in Bitcoin's price, the funds continue to hold most of their assets under management, amounting to $115 billion. This resilience is comparable to traditional U.S. exchange-traded funds.
Factors Influencing the Market
In the last month, Bitcoin ETFs have experienced capital outflows of $1.6 billion. Analysts attribute this phenomenon to the strategy of 'buy the rumor, sell the news', particularly following the announcement of the Strategic Bitcoin Reserve initiative in July 2024. This led to market instability due to the already priced-in expectations regarding Bitcoin.
Impact of Large Bitcoin Holders
Analysts note that large Bitcoin holders, known as 'whales', have sold more than 50,000 BTC in the past week, affecting market trends. The decrease in demand and the drop in Bitcoin's Sharpe ratio indicate rising risk amid macroeconomic uncertainty and increased volatility.
Despite current fluctuations and pressure factors on the market, Bitcoin ETFs demonstrate resilience, attracting the attention of long-term-focused investors.
