Recent analysis revealed that traditional centralized exchanges continue to play a crucial role in determining Bitcoin's price, despite the emergence of ETFs.
Impact of ETFs on Bitcoin Price
While the launch of ETFs has certainly increased interest and liquidity in the market, their direct impact on the daily Bitcoin price may be overestimated. According to analysis by Axel Adler Jr., trading advantage still predominantly resides with centralized exchanges.
Dominance of Centralized Exchanges in the Market
Centralized exchanges (CEX) handle an average trading volume of approximately $15.8 billion, while ETFs contribute around $1.7 billion. This means that ETFs currently account for only about 10% of overall trading volume, confirming their limited impact on daily price fluctuations.
Role of ETFs in the Bitcoin Price Context
Despite not being the primary drivers of day-to-day price movements, ETFs play an important role in providing liquidity, enticing institutional investors, and legitimizing Bitcoin as an asset. ETFs expand accessibility for traditional investors.
The discussion about what drives Bitcoin underscores the role of centralized exchanges as key influencers on price dynamics, while ETFs contribute to long-term stability and growth.
