TL; DR
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Despite attracting billions in early investments, the BTC ETFs have faced more than $1 billion in selling pressure, which has depressed the price of BTC.
Full story
Today we’re doing a post-mortem on Bitcoin ETF launches, in a new format we’re calling:
Trope and Cope.
Copium, or “coping,” is what you tell yourself to deal with bad news.
Trope for example: “The costs of Ethereum are too high.” Cope: “Ethereum Layer 2s are an affordable alternative…”
(It will make more sense as we go along).
Trope: These Bitcoin ETFs were meant to attract billions of dollars in investment and push the price up… but the price fell.
Handle: The funny thing is: she did attract billions of investments! Record amounts even.
It’s just that when Grayscale converted its Bitcoin trust (which already had tens of billions in investments) into an ETF, the company didn’t lower its fees to compete with other offerings.
As a result, some people who invested in the Grayscale Bitcoin Trust sold about $1.1 billion worth of shares after the trust turned into an ETF (so they could park their money in an ETF with lower fees).
And even then, the amount of money flowing into the ETFs within the first three days of launch was still net positive (+$588 million).
Trope: Bitcoin’s weak price performance, following the launch of the ETF, proves that traditional investors are not interested in crypto.
Handle: Maybe… but the traditional financial system moves much slower than crypto.
All these big investment advisors need to start pitching the idea of Bitcoin ETFs to their clients, explain what BTC actually is, and wait for the green light.
It will take a minute for everyone to get on board and make the assignments.
(That, otherwise it could all go to hell in a handbasket…but that’s the game we play).