- Bitcoin prices drop nearly 20%, yet U.S. spot Bitcoin ETFs continue buying, showing strong market resilience.
- Bloomberg’s Eric Balchunas highlights ETFs maintaining AUM despite downturn, with YTD net inflows stabilizing at $15 billion.
Despite a severe 20% drop in Bitcoin (BTC) prices, U.S. spot Bitcoin ETFs have demonstrated resilience by actively purchasing during this downturn. This week, Bitcoin has shown a slight recovery, sparking discussions about the sustainability of this upward movement.
In June, Bitcoin’s value decreased from $71,900 to $58,400 and dipped further in July to $53,400, only to recover to around $58,000 recently. Bloomberg analyst Eric Balchunas described the recent market movement as “nasty” but noted that the ETFs’ assets under management (AUM) and year-to-date (YTD) flows remained robust.
Bitcoin had 20% drawdown in a month flat. Pretty nasty. I would have been impressed if 90% of aum hung in there but it was over 100% as they saw inflows. The Boomers hung tough, even tougher than I predicted, and kept the all imp YTD net number at +$15b. Hanging tough during… pic.twitter.com/prG3ByynDT
— Eric Balchunas (@EricBalchunas) July 9, 2024
He expressed surprise at the resilience, stating:
“Bitcoin had a 20% drawdown in a month flat. I would have been impressed if 90% of AUM hung in there, but it was over 100% as they saw inflows…kept the all-important YTD net number at +$15 billion.”
Supporting Balchunas’s observations, data from Farside Investors confirmed that YTD flows rebounded to the $15 billion mark after a temporary dip to $14.3 billion in late June. However, Soso Value reported a decline in BTC ETFs’ AUM by nearly $10 billion, reflecting the volatility and uncertainty in the market.
Despite these fluctuations, Bitcoin ETFs witnessed substantial inflows at the beginning of the week, with $294.9 million on Monday and $216.3 million on Tuesday. These inflows suggest a renewed investor interest in Bitcoin, even as some market observers debate their impact on Bitcoin’s overall market position.
Market analyst Jim Bianco highlighted that the majority of BTC ETF investors are self-directed, contradicting the notion that primarily older generations hold these investments. This demographic insight underscores the broad appeal of Bitcoin to a diverse group of investors seeking exposure to cryptocurrency through traditional investment vehicles.
Not boomers, a tiny percentage.
BlackRock said this 3 weeks ago …
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For now, about 80% of bitcoin ETF purchases have likely been coming from “self-directed investors who have made their own allocation, often through an online brokerage account.https://t.co/Iyg7La2CfD— Jim Bianco (@biancoresearch) July 9, 2024
At the moment, Bitcoin shows a 5.8% increase over the week, trading just above $59,000. For a more robust recovery, it needs to surpass the $60,800 mark. Technical indicators like the Relative Strength Index (RSI) and the Directional Movement Index (DMI) indicate some strengthening, but they also show that the market control isn’t fully in the bulls’ hands yet.
Last week was a difficult one for Bitcoin (BTC) bulls
Last week was a difficult one for Bitcoin (BTC) bulls. However, in the darkest moments, the dawn is near. During last week’s sharp decline, we observed a higher bottom on the RSI, indicating a positive divergence, which is an encouraging sign.
Note how the negative divergence defined the peak in March. Will we see a repeat, but from a bullish perspective? We maintain an optimistic stance.
As discussions continue and the market reacts to new data, the resilience of Bitcoin and its related financial products like ETFs will remain a key narrative in understanding the dynamics of the cryptocurrency market.
