Understanding the three phases of the Bitcoin ETFs market

Bitcoin ETFs report, June 2024

Initial surge from early adopters. Transition period. Moderate growth with a long term horizon. 

Back before the Bitcoin ETFs were approved that was my vision of how the rollout of the ETFs would play out.

With five months worth of data it looks like I was correct. Except for the fact I had underestimated the size of the initial surge. 

But at least we have the correct framework to look at the ETFs and how they can impact Bitcoin’s price. So let’s dive in.

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Understanding the three phases of the Bitcoin ETFs market

The takeaway

Bitcoin’s surge at the beginning of the year was the work of early institutional adoption of the Bitcoin ETFs. 

The relatively low price of BTC at the time of the ETFs launch and the amount of coins they had to buy in order to satisfy the demand is all you need to explain this move. 

But we are past this phase now. And in the absence of some macro boost our default expectation should be for a slow growth of the coins held by the ETFs.

This kind of growth is good for the long run, but it does not create the kind of explosive bull markets most investors are expecting for Bitcoin. For that you need a strong accumulation momentum. The kind that’s brought about by global liquidity surges.

The three phases of the Bitcoin ETFs market