The Impact of ETF Approvals on Bitcoin’s Stability
Bitcoin’s price has recently exhibited stability, closing the week at approximately $41,600, with a slight 0.4% decrease from the previous week’s closing value of around $41,750. This stability has been attributed to the approval of Exchange-Traded Funds (ETFs) by the Securities and Exchange Commission (SEC), as noted by research analyst Matteo Greco from Fineqia International.
“The reduced volatility can be attributed to the recent approval of ETFs by the SEC, putting an end to speculation surrounding this development,” Greco highlighted in a report shared with Cryptonews.com.
- Introduction of Bitcoin (BTC) Spot ETFs
- Significant inflows from traditional finance
- Cumulative inflows of $1.15 billion for 11 Spot ETFs
- Partially offset inflows from the Grayscale Bitcoin Trust (GBTC)
Greco also pointed out that following the ETF conversions, GBTC witnessed outflows of about $2.81 billion, reducing the net inflow of the 11 BTC Spot ETFs to $1.15 billion. The conversions resulted in a decrease in BTC holdings from 620,000 to 552,000.
“The outflows from GBTC are mainly due to restrictions on redeeming shares and higher management fees compared to competitors,” Greco explained.
Robust Activity in BTC Spot ETFs and Predictions for Ethereum
The BTC Spot ETFs have shown active trading, with a cumulative volume of around $16.6 billion over six days, averaging about $2.77 billion daily. It was not surprising that GBTC had the highest volume due to the Trust’s conversion into an ETF.
Analysts are now eyeing the potential inclusion of other digital assets in ETFs, with a probability of over 70% for Ethereum (ETH) Spot ETFs receiving approval. The approval of BTC Spot ETFs led to capital shifting from BTC to ETH, resulting in a 17% appreciation of ETH against BTC and an 11% rise in dollar terms during the approval week, reflecting market confidence in the approval of ETH Spot ETFs.
