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?