Samson Mow, the founder of bitcoin company JAN3, claims that the digital currency would have had a much lower price without the Spot Bitcoin ETFs. “Without the ETFs we could have seen a drop of 10 to 20 percent yesterday. Bitcoin volatility has dropped significantly,” Mow said.
Without the ETFs we could have seen a 10-20% drawdown yesterday. #Bitcoin volatility has been significantly reduced.
— Samson Mow (@Excellion) February 21, 2024
Bitcoin helped by ETFs
The founder of JAN3 believes that the inflow of new capital through ETFs is already crucial for the bitcoin price. That may be true, because after the first month several billions have already flowed into the ecosystem.
Those billions of dollars were enough to give the bitcoin price a significant boost. In that respect, it will be interesting to see what the effect of this will be in the longer term.
In any case, thanks to the ETFs, the liquidity of bitcoin has increased. There is more capital in the market, which means more money is needed to significantly move the bitcoin price.
This reduces the volatility of bitcoin and can make it easier for many investors to get involved. An illiquid market is extremely unattractive to investors.
Why?
Because you may not be able to sell your assets when it is really necessary.
Quiet days for the ETFs
It appears that the Spot Bitcoin ETFs have slowed down a bit in recent days. On February 21 they had an inflow of 1,409 bitcoin and on February 22 there was an inflow of 649 bitcoin.
That’s in stark contrast to the 10,905 bitcoin we saw on February 16 or the 12,192 bitcoin of February 14.
But that does not alter the fact that a positive flow is always a good development for bitcoin. Of course, ETFs are not the only way investors get into bitcoin. It is possible to purchase the digital currency in many different ways.
Source: https://bitcoinmagazine.nl/nieuws/zonder-etfs-zou-de-bitcoin-koers-20-lager-staan
