$131 Million Secret War: When BlackRock "Die-hard Fans" meet FTX "Survivors" in a chip exchange

Original title: How $131m ETF inflows stabilised Bitcoin's price

Original author: Pedro Solimano

Original source:

Compiler: Daisy, Mars Finance

How the $131 million ETF inflow stabilized the price of Bitcoin

Bitcoin exchange-traded funds barely saw net inflows last month

BlackRock's IBIT fund ranked among the top 1% of U.S. ETFs in terms of inflows during the year

"This phenomenon is impressive and helps explain why the price of bitcoin is so stable," said Bloomberg ETF expert Eric Balchunas. Wall Street is doing what everyone thought was impossible: at least the stabilization of the price of bitcoin by the standards of cryptocurrencies.

According to Bloomberg's Eric Balchunas, Bitcoin ETFs have taken in $131 million in the past month. Among them, BlackRock led the way with a net inflow of $2.4 billion, and its fund ranked among the top 1% of U.S. ETFs this year. These flows have helped Bitcoin remain resilient in the maelstrom of Trump's global trade war. While traditional capital markets have been battered, Bitcoin has shown remarkable stability – at least in the last few weeks.

Bitcoin is currently trading at $84,800, up 6.6% in seven days, while traditional stocks are generally down 3%-5% over the same period. Balchunas commented on social media on Thursday that "this is amazing" and noted that "the flow of funds from ETFs reveals the root of the relative stability of Bitcoin's price: its holder structure is more stable."

Is it too early to assert that there has been a fundamental shift in the Bitcoin market ecosystem? Before institutional investors such as BlackRock enter the market, any bearish news could trigger panic selling. Today, "stress resilience" has become the new normal. "ETF investors are much more firm than most people think," Balchunas stressed.

According to Dune Analytics, Bitcoin ETFs currently have more than $93 billion in assets under management, accounting for more than 5.5% of Bitcoin's total circulation. Another large holder is Michael Saylor's MicroStrategy, which holds 582,185 BTC worth $44 billion.

Balchunas has long advocated for Wall Street investors to be more patient than native crypto investors. Today, this view is gaining more acceptance. "We haven't seen a large number of retail investors rushing into the market in this cycle," Bitcoin analyst James Check noted in his On-Chain Verification report released on Thursday.

"Tourist" sellers

Who is selling Bitcoin to BlackRock and Saylor?

When the Bitcoin ETF was approved in January 2024, Grayscale GBTC investors reduced their holdings on a large scale, and the new ETFs all undertook these sell-offs. "Over the past 15 months, ETFs and Thaler have continued to absorb selling pressure from all directions, including 'tourists', FTX survivors, GBTC discount arbitrageurs, judicial unlocking chips, and government confiscation of assets," Baljunas explained. The term "FTX survivors" may refer to investors who successfully divested but were hit hard by the Sam Bankman-Fried scandal and eventually chose to leave the market. Creditors of the bankrupt exchange are expected to be paid in late May.

For Balchunas, as long as these sell-offs are picked up by well-funded institutions, they are welcome. "[ETF investors] should improve the long-term stability of the market and reduce volatility and correlation."

Daily Crisis

Of course, Bitcoin is not resting.

The sluggish online activity has sparked a heated debate between Jack Dorsey and Michael Thaler about an existential crisis. Dorsey warned that if the status quo continues, the network is "bound to fail." And U.S. miners, who are the guardians of cybersecurity, are facing the dilemma of shrinking earnings. "It's just day-to-day chaos," Nick Hansen, chief executive of miner Luxor, previously told DL News.