The green light given to spot Bitcoin exchange-traded funds (ETFs) in the United States has brought legitimacy to the cryptocurrency industry in the eyes of investors. This approval has paved the way for the launch of the first regulated and publicly traded investment vehicles based on Bitcoin (BTC).
Sheraz Ahmed, the managing partner of Storm Partners, believes that the launch of Bitcoin ETFs has caused a significant shift in investor mentality. According to Dune data, these US spot Bitcoin ETFs have accumulated a total of $57.7 billion worth of Bitcoin in onchain holdings.
The introduction of Bitcoin ETFs is a crucial step towards legitimizing the crypto industry, particularly in the eyes of the mainstream. However, it is not the ETFs themselves that are providing peace of mind to crypto investors, but rather the regulatory approval that underlies them, as stated by Sheraz Ahmed.
On June 10, the US Bitcoin ETFs broke a streak of 20 consecutive days of net positive inflows. Since then, there have been four consecutive days of net outflows, totaling over $152.4 million, according to Farside Investors data. This coincided with a decline in the price of Bitcoin, which dropped to a one-month low of $64,032 on June 18, finding support at that level, as per Bitstamp data.
The inflows into the ETFs played a significant role in the price rally of Bitcoin in 2024. By February 15, these ETFs accounted for approximately 75% of new investments in the world’s largest cryptocurrency as it surpassed the $50,000 mark.
In conclusion, the approval of US spot Bitcoin ETFs has had a profound impact on the cryptocurrency industry, gaining recognition from investors and offering reassurance through regulatory oversight. The recent outflows from the ETFs coincided with a dip in Bitcoin’s price, but these investment vehicles continue to play a crucial role in the market.