Bitwise CIO says Bitcoin's dip driven by ETF overenthusiasm, not Grayscale outflows

cyptouser4 months agoCryptocurrencies News68

Bitwise chief investment officer Matt Hougan attributed the recent decline in the crypto market to overinflated expectations regarding the potential impact of the newly launched Bitcoin exchange-traded funds (ETFs).

In a Jan. 23 post on X (formerly Twitter), Hougan explained that the current market sell-off is driven by what he terms an “ETF Expectations-led” phenomenon.

According to him, investors anticipating “larger net flows into (these) ETFs” front-ran the approval news by piling into both spot and derivatives positions on the flagship digital asset. However, with the expected inflows not materializing, these investors are now “unwinding that bet,” prompting the current market situation.

“Just as the market overestimated the short-term impact of ETFs, it is underestimating the long-term impact,” Hougan concluded.

Since the Securities and Exchange Commission (SEC) approved the launch of several spot Bitcoin ETFs in the U.S., the value of the top cryptocurrency has been on a downturn. The digital asset fell to as low as under $39,000 on Jan. 23 but has recovered to $40,389 as of press time, according to CyptoRanking’s data.

This downward trend raised concerns within the crypto community, with some attributing it to the outflows from Grayscale’s Bitcoin Trust ETF (GBTC).

Contrary to this sentiment, analysts, including CryptoQuant founder Ki Young Ju, share a perspective aligned with Hougan’s.

Young Ju recently emphasized that Bitcoin operates in a futures-driven market, making it less susceptible to spot-selling activities from GBTC-related issues.

“BTC falls due to derivative market selling, not GBTC. OTC (over the counter) markets are very active, but no price impact,” he added.

ETFs are BTC net buyers.

Meanwhile, the Bitwise investment chief also clarified that the recently launched ETFs are net buyers of Bitcoin despite the outflows emanating from GBTC.

Hougan pointed out that while GBTC functions as a net seller, the cumulative BTC acquisitions from the new ETFs surpass that being offloaded by Grayscale.

Bloomberg data corroborates Hougan’s view. As of Jan. 23, GBTC’s outflows stood at $3.45 billion, while the newly introduced nine ETFs had a combined inflow of more than $4 billion in assets under management.

Bitcoin ETFs
Bitcoin ETF Flows as of Jan. 23 (Source: Bloomberg/James Seyffart)

This data stresses a compelling narrative—that the ETFs have seen substantial interest from the community, leading to a swift and significant accumulation of the leading cryptocurrency.


Oluwapelumi Adejumo

Journalist at CyptoRanking

Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.

@hardeyjumoh LinkedIn Email Oluwapelumi Editor

Liam 'Akiba' Wright

Senior Editor at CyptoRanking

Also known as "Akiba," Liam is a reporter, editor and podcast producer at CyptoRanking. He believes that decentralized technology has the potential to make widespread positive change.

@akibablade LinkedIn Email Editor Latest Report

Bitcoin ETFs: An in-depth look at the first 5 days of trading

We explore the first 5 days of Bitcoin ETF trading, analyzing their inflows and implications on the broader market.

Andjela Radmilac · 4 days ago
The content on this website comes from the Internet. Due to the inconvenience of proofreading the authenticity and accuracy of the copyright or content of some content, it may be temporarily impossible to confirm the authenticity and accuracy of the copyright or content. For copyright issues or other issues caused by this, please Call or email this site. It will be deleted or changed immediately after verification.

related articles

Polkadot introduces JAM upgrade and 10 million DOT prize to enhance network capabilities

Gavin Wood, Polkadot’s founder, introduced the Gray Paper outlining the upcoming Join-Accumulate Mac...

Mad Money's Jim Cramer flips script on Bitcoin, calls it a 'technological marvel'

Jim Cramer, known for his influential role as the host of CNBC’s “Mad Money,” has comple...

Omnichain simplified: How to connect data and assets on blockchain

Omnichain simplified: How to connect data and assets on blockchain

b98df8a0˃Entangle omnichain infrastructure introduces a versatile messaging infrastructure, bringing...

CommEx to onboard 1 million Russian customers from Binance amid increased competition - report

CommEX, the company that acquired Binance’s Russian operations, anticipates approximately a mi...

Ripple's $25M donation powers Fairshake PAC's crypto advocacy in 2024

Ripple's $25M donation powers Fairshake PAC's crypto advocacy in 2024

55966e89˃Fairshake, a pro-crypto United States super political action committee (PAC), has seen its...

This blockchain platform offers decentralization, security and scalability in tandem

This blockchain platform offers decentralization, security and scalability in tandem

1205f261˃Partisia Blockchain is an L1 with novel zero-knowledge oracle and sharding solutions, sorti...