Bitcoin Cannot Grow Without the Spot Bitcoin ETFs: Report

Spot Bitcoin ETFs have been a major catalyst in driving BTC to establish an all-time high months before its fourth halving. According to a new report by Ecoinometrics, Bitcoin cannot grow further without those products.

These funds appear to have “stopped accumulating coins” (in aggregate) for more than a month, which can be a cause of concern for the leading asset’s future price trajectory.

Bitcoin’s Growth Hinges on ETFs

From January to mid-March, spot Bitcoin ETFs managed to accumulate 200,000 BTC, despite significant outflows from Grayscale. This accumulation coincided with bitcoin’s price surge from $40,000 to $75,000.

However, the inflow of BTC into ETFs stopped, leading to a halt in price movement.

The report stated,

“If you’re wondering why bitcoin is stuck in the $60k range, look no further. The ETFs have stopped accumulating coins for a while now. They are the only game in town. No demand from them means no price appreciation.”

Despite the lack of action in the past thirty days, Ecoinometrics said that investors should not lose sight of the big picture. Its report further said that bitcoin is the only hedge investors need against debasement.

Bitcoin Best Bet Against Debasement?

Analyzing the performance of bitcoin, gold, and the NASDAQ over the last decade, adjusted for the growth of the global monetary base, the report found that the yellow metal remains flat, merely keeping pace with global liquidity despite hitting new all-time highs. This represents the baseline level of hedging against debasement.

On the other hand, the NASDAQ has seen a threefold increase, which is commendable. However, bitcoin has outperformed both by a significant margin, boasting a staggering 44-fold increase in value. This highlighted bitcoin’s effectiveness as a hedge in today’s economic climate.

However, certain counterarguments exist by prominent industry experts. Crypto analytics platform Kaiko, for one, said that bitcoin has failed to attract safe-haven flows even in the face of increased demand for such assets amidst the conflict in the Middle East.