Bitcoin ETFs Are Influential, but They Are Not the Primary Force Driving the Market

Senior Bloomberg ETF analyst Eric Balchunas suggests that without the success of Bitcoin ETFs, the digital assets's price would hover around $20,000 instead of the current $60,000.

Bitcoin exchange-traded funds (ETFs) have seen strong demand in 2024, attracting a net inflow of over $17 billion.

According to Bloomberg ETF senior analyst Eric Balchunas, if not for the success of Bitcoin ETFs, the digital asset’s price would currently be around $20,000 rather than the present level of about $60,000. He attributes the bulk of Bitcoin’s price increase to ETF activity.

“Take the ETFs away from the picture and btc price is probably around $20k.”

However, I would have to disagree with Balchunas’s assessment. I have highlighted that the volume of Bitcoin ETFs is still quite small compared to the futures market, which plays a larger role in influencing Bitcoin’s price.

Futures trading volume has reached $74 billion as of Aug. 12, far exceeding the ETF trading volume of $1.3 billion, according to data from checkonchain.

I find myself agreeing more with the analysis of Checkmate, a respected Bitcoin analyst, who points out that the net capital flows in the Bitcoin market are around $12 billion per month, with long-term holder supply changes at about $1.6 billion, which are both much larger than any given ETF inflow or outflow per month.

In essence, while ETFs are influential, they are not the primary force driving Bitcoin’s market. As Checkmate puts it,

“At best, the ETFs are 20% of the influence. They are important, but not the driver.”

James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century's paramount invention.

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