As Bitcoin continues to initiate a major price recovery, market strategist and investor, Joao Wedson has offered an in-depth examination of how the BTC Exchange-Traded Funds (ETFs), particularly the German investment fund ETC Group Physical Bitcoin (BTCE) might affect the price of the cryptocurrency asset. His research comes at a critical junction when investors are keeping a careful eye on events and developments that may influence the prospects of BTC in the long and short term.
Correlation Between BTC ETF And The Price Of Bitcoin
The introduction of the Bitcoin ETFs marked a significant milestone for the BTC and the cryptocurrency landscape, triggering major rallies in the market. However, crypto investor, Joao Wedson has broken down the connection of the products with BTC’s price, pointing to recent trends and changes in the fund’s behavior.
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Emphasizing the subject, Wedson noted that following the inception of BTC ETFs, the German investment fund ETC Group Physical Bitcoin with the ticker, BTCE, has been gradually decreasing its BTC holdings. He further mentioned that the fund has historically been related to the movements in BTC, drawing attention to a scenario in 2020.
According to the expert, in 2020, the company expanded its positions from 0 to 23,480 BTC, and at the same time, the crypto asset witnessed its first historical peak in April 2021. Also, when the firm’s BTC holdings began to decrease, the price of Bitcoin simultaneously declined in most cases.
Presently, the company’s reserves, which peaked at 27,980 BTC in January 2024, have been declining since then and are currently less than 17,000 BTC. This simply means that the German ETC Group has been cutting their positions on a daily basis. However, despite the constant reduction of holdings, the expert has highlighted that compared to the previous scenario, the impact on the value of BTC has not been significant.
Furthermore, Wedson including a 30-day variance study has stated that while negative variations are typically tied to local lows and price declines, positive variations are linked to an increase in the price of Bitcoin. “The exception is the most recent movement, where Bitcoin rose while the fund continued to liquidate its positions and has been doing so since then,” he added.
As investors navigate the volatility of BTC, Wedson has underscored the need to keep an eye on the fund’s development and the effects of these changes on Bitcoin’s price to gain a deeper understanding of new connections and market patterns.
Massive Adoption Of BTC Amidst Market Uncertainty
While retail investors have been on a selling spree, Bitcoin For Freedom, a crypto enthusiast has cited an increase in the adoption of BTC at the institutional level.
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According to the enthusiast, as the general public sells, spot ETFs have acquired over 1 million BTC, Michael Dell is discussing BTC, Goldman Sachs holds $500 million in BTC, Blackrock ETF has purchased over 5,000 BTC in a period of 5 days, among others.
Featured image from iStock, chart from Tradingview.com