ETFs Are Booming In Europe, But Why Is The Price Of Bitcoin Stagnating?

The Bitcoin ETFs recently crossed the threshold of 20 billion dollars in capital in the United States, and this momentum shows no signs of slowing down. From one continent to another, investors are rushing toward these financial instruments, attracted by the promise of quick gains. Europe is not left out, with over 105 billion dollars invested in Bitcoin ETFs in 2024, a record. But then, why does the price of BTC struggle to surpass the symbolic barrier of 70,000 dollars?

Bitcoin ETFs: A record influx but a muted impact

European investors have poured over 105 billion dollars into Bitcoin ETFs in the United States this year, shattering all previous records. This wave of investments is not just European; Asian flows are also on the rise.

Despite this enthusiasm, the price of Bitcoin has remained stuck below 70,000 dollars since July.

A Bloomberg analyst, Eric Balchunas, noted that these massive inflows do not immediately produce the expected effect on the market, due to the use of ETFs as “exit liquidity” by some traders.

• About 75% of the new capital inflows contributed to surpassing 50,000 dollars in February 2024;
• Bitcoin ETFs now hold over 66.3 billion dollars in BTC on the blockchain;
• The Bitcoin network’s computing power, or hashrate, reached a record level on October 21.

Europe ♥️'s America.. flows into US-focused ETFs by locals in Europe is now at a record $105b YTD. And why not? $SPY is up 24% vs 10% for Europe. Asia also funneling record flows over here as well via @psarofagis pic.twitter.com/zjE7MoiXIX

— Eric Balchunas (@EricBalchunas) October 21, 2024

Stagnation of BTC price despite records

The price of Bitcoin, although bolstered by ETF inflows, has not managed to break the glass ceiling of 69,500 dollars, an ultimate signal of imminent explosion. This situation persists despite six consecutive days of positive net inflows into ETFs, with a peak purchase of 555 million dollars on October 14, which only triggered a temporary increase of 5%.

According to analysts from Bitfinex, the delay in the impact of ETF inflows can be explained by the order of transactions in the market. The strong initial demand is often followed by a correction once the momentum fades.

Thus, market participants should remain cautious, as the rise of Bitcoin ETFs could soon dictate market flows. Heavyweights like BlackRock and Grayscale have certainly not said their last word.