I wrote the day before yesterday about an article I found that suggests big investors are not yet involved in Bitcoin ETFs, judging by the size of the share purchases in the said ETFs. But that topic stayed with me because it sounded illogical.
One of the reasons spot Bitcoin ETFs were created was to allow firms that were constrained by stricter regulations from investing directly in Bitcoin to do so via the ETFs. So, what would be the holdback now?
I don't buy that these are mostly retail purchases into the Bitcoin ETFs, although at first I was inclined to believe it given the article I read and wrote about.
The theory says that if the average purchase is around 326 shares into BlackRock's ETF (around 13k USD), these must be retail investors.
So, why don't I buy into this theory anymore?
If you were a big investor able to move millions, dozens of millions daily, would you invest them all at once into a Bitcoin ETF? Why would you do that? To push prices into extreme pumps due to liquidity shortages? BlackRock's Bitcoin ETF already had the best first month of all ETFs ever created. But these investors simply cannot enter a small market at once, they enter gradually. And they exit the same way. Unless they can find a counterparty for a big deal. But who would sell them a big chunk of Bitcoin now?
I don't deny there must've been plenty of retail purchases into the Bitcoin ETFs. But I also think these inflows include big investors who simply broke their orders into smaller chunks and executed them at different times and days and probably through different intermediaries too. As far as I understand it, ETFs don't have stats on the original investors if they came through different brokers.
Whales have their problems too, they can't often move quickly all-in or all-out with their investments.
Here's a quote from the same article I kind of ignored initially:
“I would say, broadly, it’s a lot of retail,” said Kyle DaCruz, director of digital assets products at VanEck. But there’s a lack of transparency into who invests in ETFs in the early days of launch as many of the trades are executed by authorized participants, market makers and brokers, who all invest on behalf of an entity, he added.
I don't accept the fact that big investors aren't in yet! I believe this is a smoke screen (and I fell for it initially), with the purpose of not creating higher FOMO, too soon. And the buying pressure was still very high. We had a new ATH for Bitcoin before halving (actually several) for the first time in history. And here we are again above 70k. Looks like the lid is very hard to be kept on. Is the halving pullback over so soon?
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I find with investors that they are in 2 camps about Bitcoin and crypto in general, either they are in or they are out. The launch of ETFs might not have swayed many new ones yet, but existing ones could get a lot more exposure. Bitcoin looks so cheap at the moment imo.
There is a category of investors that prefer ETFs for whatever reason. And I don't know the limitations on 401k's or what Americans have, but I think they could not buy Bitcoin with funds from 401k directly. They can buy ETF shares.
That makes more sense. Big investors having early access and not being revealed seems pretty normal. But if that were the case, are the retail the only ones pushing the price up?
I don't think they had early access, ETFs were approved on the same date for everyone. Sure, maybe some of them front-ran retail by using the professional tools at their disposal. But if they used smaller buy orders, they can be taken as retail.
The truth is that we’ve got so many big investors here but they don’t advertise what they do or make any form of noise
They keep it cool and that’s why we sometimes hear that there are some countries holding a large amount of BTC
I agree. We only know about those who want publicity and those who are forced to declare their moves/holdings publicly because of regulations.
I don't buy that fact either. I do think that there are definitely some institutional investors in the ETFs but they might not have a very large position. It doesn't make sense to have zero exposure and for everyone to skip out.
Yep, exactly. A few smart guys don't want to let everyone know that they are loading and send Bitcoin "to the moon" already.
I saw this kind of strategy when I was in the stock market.
Yep, it's well-known there.
Yeah, big investors can't do a big spike, that moves too much the market, little by little is better
That's usually how they operate in markets with lower liquidity than they move regularly.
At the moment there is a lot of hype in the market due to which only money is flowing into the market and people are not withdrawing money due to which the price is going up and yet they have put their investment. And they are adding more as well but we will not be told at all when they will sell things in the market.
Yeah, many big investors rarely advertise their moves, unless they are forced to by regulations.
People eye is not yet opened to see the performance of bitcoin and it is just a matter of time
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