BlackRock's Bitcoin ETF is showing top 1% performance despite customs confusion. Analysts theorize that issuers are stabilizing Bitcoin's volatility, and the ETF market will make Bitcoin safer in the future.
Issuers, as major whales, are purchasing token dumps from retail investors. However, this new stability entirely depends on powerful corporations exposed to broader macroeconomic concerns.
ETF, Bitcoin Stabilization?
Trump's tariff threats brought chaos and uncertainty to the global market, but Bitcoin's price remains relatively stable. Although it has fallen from its all-time high in January, the price is still much higher than its performance before the November election.
According to one analyst, ETF can provide additional stability to Bitcoin:
"Bitcoin ETF recorded positive inflows last month and early this year, with IBIT increasing by $2.4 billion year-to-date (top 1%). It's impressive, and in my opinion, helps explain why BTC's price is relatively stable: owners are more stable. ETF investors are much stronger hands than most think. This will increase long-term stability and lower volatility and correlation." – Eric Balchunas.
Since Bitcoin ETF first appeared in the market, it has completely transformed the cryptocurrency industry, but quantifying that change was difficult.
However, this economic crisis provided analysts with a useful opportunity to collect definitive data in stress tests. Balchunas emphasized that ETF issuers have strong demand for BTC, which has driven several changes.
Over the past few months, US ETF issuers have purchased enormous amounts of Bitcoin. They exceeded Satoshi's holdings in December and purchased BTC 20 times the global mining volume in January. Retail investors solved this supply crisis.
Bitcoin is more integrated into traditional finance than ever, offering several opportunities. Retailers had to dump tokens for various reasons.
Usually, such actions could surprise the market, but ETF issuers (and Michael Saylor's strategy) tried to purchase as many Bitcoins as possible.
In other words, these whales significantly contributed to maintaining market confidence. Ideally, ETF issuers can have a generally positive impact on this sector and address Bitcoin's notorious chronic volatility.
Unfortunately, these substantial changes come with serious practical drawbacks, even excluding decentralization concerns. Since ETF has transformed the market this way, Bitcoin is more intertwined with broader macroeconomic trends than ever before.
However, these trends could force these big whales to sell. Can we entrust Bitcoin's fate to these actors?
ETF issuers have high confidence in Bitcoin, which kept prices stable amid customs confusion. If they lose that confidence for any reason, it could trigger a strong demand crisis.
This investment trend has brought enormous benefits to the cryptocurrency industry, but it's important to watch the potential risks involved.
