Key facts:
Despite the poor performance of ETFs, the price of bitcoin remained largely unchanged.
Investors are awaiting a possible rate cut in the US.
Since the launch of Bitcoin (BTC) exchange-traded funds (ETFs) in the United States, it has been said that they have a great influence on the price of the digital asset.
Market analyst James Van Straten has presented a perspective that challenges this dominant narrative. This states that there is no such direct relationship.
Van Straten focuses on the three largest ETFs on the market, managed by BlackRock, Grayscale and Fidelity, which Together they manage 757,313 BTCequivalent to approximately 43 billion dollars.
Despite its immense size, the analyst maintains that These funds do not determine the price behavior of BTC.
“Even when you see significant inflows into these ETFs you don’t see big moves in the price of Bitcoin over the next seven days,” Van Straten explained, referring to recent data showing a lack of immediate correlation between capital flows into ETFs and the price performance of the digital asset.
In the following graph he published, this dispersed relationship is evident, with points representing moments in time.
The horizontal axis shows net flows into bitcoin ETFs in dollars, with values on the right indicating higher inflows and on the left higher outflows. The vertical axis reflects bitcoin’s price performance over the past seven days.
Thus, Van Straten concludes that it cannot be stated that an increase in capital in ETFs necessarily causes the price of bitcoin to risenor can a capital outflow cause it to fall.
Last week, for example, There were reports of money outflows from ETFs, but this did not cause significant fluctuations in the price of bitcoinwhich remained mostly stable between $57,000 and $58,000, as reported by CriptoNoticias.
Other factors play a bigger role for the price of bitcoin
The analyst also points out that, despite the power of ETFs, there are other factors that play a more relevant role in the price of Bitcoin.
Among them are Market sentiment and macroeconomic eventsThese factors, according to Van Straten, can influence both increases and decreases in the price of the cryptocurrency.
A clear example of this is the expectation surrounding the US Federal Reserve’s decision on interest rates, which is expected to take place next Wednesday, September 18.
A reduction in interest rates, as many anticipate, could lower borrowing costs, which would encourage investors to borrow to acquire riskier assets, such as bitcoin, cryptocurrencies in general or stocks.
When financing costs are lower, the appetite for speculation increases, and Investors are looking for instruments that promise higher returns, even if they are more volatile, as is Bitcoin itself..
In this context, a lower interest rate could increase the demand for BTC and, as a result, its price.
This can be interpreted as meaning that bitcoin has the ability to move independently of traditional markets, and that the impact of ETFs on its price should not be overestimated.