Can you day trade Bitcoin based on the ETFs flows?

The answer is no

We have looked at Bitcoin through a lot of angles. And whether we are talking growth rate, volatility or on-chain activity there is a clear before and after the ETFs. The ETFs are in the driver’s seat.

On the surface it is easy. 

The ETFs are a source of sustained demand. They are bringing new cash into the market. That’s driving Bitcoin’s price up.

But when you look at the data more closely things are not that straightforward.

---

The Ecoinometrics newsletter gives you insights from crypto and macro data to help you make better investment decisions. 

We spend hours every day gathering data, creating metrics and bringing them to life with data visualizations that allow you to quickly get to the heart of things.

We then distill all that knowledge in each issue of the newsletter with less words and more charts so that you get insights, direct to the point, in five minutes or less.

Join more than 21,000 investors here:

Done? Thanks! That’s great! Now let’s dive in.

P.S. we have just released a new dashboard on the Bitcoin miners. The purpose of this dashboard is to track if the Bitcoin miners stocks are over priced or under priced relative to Bitcoin. Paid subscribers can check it out here.

---

Can you day trade Bitcoin based on the ETFs flows? 

The takeaway

If you are making a long term bet on Bitcoin then it is good enough to bet that the ETFs have the potential to drive hundreds of billions worth of assets into BTC. 

That should be your main focus. Remember the midwit meme… overcomplicating things is unlikely to improve your investment thesis. Quite the opposite.

But I don’t want to make it sound like the situation is completely clear on smaller time scales.

With the data we have so far there does not seem to be any correlation between Bitcoin’s weekly or daily performance and the aggregate ETF flows over the same period.

Maybe a pattern will emerge over time. But for now we cannot predict what Bitcoin will do over a short period of time just by looking at the ETF flows. 

The moral of the story is that you are better served by thinking long term which is where the macro trend really shows up.

A week of outflows and a week of negative performance