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BTC spot ETF demand proves Bitcoin is a macro asset

Bitcoin By
1710951310 KYC Bitcoin and the failed hopes of AML policies Tracking
1710951310 KYC Bitcoin and the failed hopes of AML policies Tracking

Takeaways from the conference:

  • Avenir Group’s and Glassnode’s data show that the majority of BTC spot ETF flows are long-only, unhedged positions. These indicate a genuine institution’s conviction, rather than an reliance on arbitrage short-term strategies.

  • BTC is still a typical macro-asset, with strong correlations for equities (including gold), liquidity, and the equity cycle, but it also has a negative relationship to dollar rates and credit spreads.

The new study shows that Bitcoin is a large portion (90%) of the total Bitcoin market.BTCETFs are not driven by arbitrage strategies or futures hedged, but rather by the long-term demand of traditional markets. This is only one part of a much more fundamental transformation.

You can also find out more about the A-Team here. collaborative report Glassnode Group, Avenir Group and others have stated that the US spot Bitcoin ETF launch was an important milestone for the cryptocurrency market. However, it remains to be seen whether this influx of money is genuine or the result of base trades exploiting the price difference between CME Futures and Spot markets.

Unhedged Demand for Bitcoin ETF. Source: Glassnode/ Avenir Group

All short positions on CME Bitcoin Futures by asset managers, dealers and hedge funds were assumed to be perfectly hedged with ETFs. In order to address this issue, a brand new framework was created.

Avenir Group’s Helena Lam, Glassnode analysts UkuriaOC, and CryptoVizArt stated that data shows a strong correlation with unhedged supply and demand. spot Bitcoin ETF inflows. It is clear that the majority of capital flowing into ETFs is a reflection of genuine exposure to the direction in which the markets are moving. This suggests that investors aren’t just testing the market but have a conviction.

Analysts said the steadily rising spot ETFs are a sign of a change in Bitcoin’s market profile. Bitcoin is becoming increasingly treated like an institutional asset. The shift in the market brings with it more stable capital and improved liquidity.

Related: Bitcoin hashrate down ~15% since June 15, steepest drop in 3 years

Bitcoin’s identity crises is now over

In addition to spot ETFs, the research found that Bitcoin was increasingly acting like a macro-asset, its performance closely tied with broader financial conditions. Data shows growing positive correlations with traditional risk-on assets such as the S&P 500, Nasdaq, and gold, while inversely tracking the US Dollar Index and credit stress indicators like high-yield spreads.

Cryptocurrencies, Dollar, Bitcoin Price, Markets, Bitcoin ETF
Bitcoin correlation with macro-indicators and assets Source: Glassnode/Avenir Group

Bitcoins’ response to Global Liquidity Index(GLI) also highlights the shift, as Bitcoins rally during times of expanding liquidity but falter when financial conditions tighten.

Supporting this evolving trend, André Dragosch, the head of research at Bitwise Europe, highlighted Bitcoin and global money supply are linked.

Analysts caution against short-term forecasts based on global liquidity. “statistical evidence suggests a long-run relationship,” According to estimates, every increase of 1 trillion dollars in the world’s money supply can translate into an $13,861 price rise for Bitcoin. 

Related: Anthony Pompliano’s crypto venture buys $386M in Bitcoin

This article contains no investment recommendations or advice. Each investment or trading decision involves some risk. Readers should do their own research before making any decisions.