Bitcoin exchange-traded funds (ETFs) that launched in the United States early this year will need more time before they become an "instrument of adoption" instead of being a “small tourist tool,” says a former Wall Street analyst.
Jim Bianco, the CEO of analytics firm Bianco Research said in a Sept. 8 X post that he doesn't think spot Bitcoin (BTC) ETFs have lived up to the pre-approval hype since they launched for trading in January.
He claimed recent outflows, holders losing on their positions and a lack of major institutional investment are signs that the Bitcoin ETF market might need more time to mature.
“The first eight months of Spot BTC trading have shown that build it, and the boomer will come was never ‘a thing,’” he said.
Source: Jim Bianco
There has been over $1 billion in net outflows from the 11 US Bitcoin ETFs in the last eight trading days, according to Farside Investors data. The spot Bitcoin ETF market now sits at around $48 billion in assets under management, down from its peak of $61 billion in March.
Bianco added that “very little new money has entered the crypto space” as most ETF inflows were from “onchain holders moving back to Trad-fi accounts.”
BlackRock’s chief investment officer of ETF and Index Investments, Samara Cohen, said in June that about 80% of Bitcoin ETF purchases have likely been self-directed online accounts.
Source: Jim Bianco
Bianco speculates that the next Bitcoin halving in 2028 and a “significant development of onchain tools” will likely be needed before the market truly hits its stride.
“Patience and another couple of seasons, including a winter or two, and development breakthroughs are needed first,” he added.
Other analysts weigh in
Not all have agreed with Bianco’s assessment. Bloomberg senior ETF analyst Eric Balchunas noted in a Sept. 8 X post that the Bitcoin ETFs had billions of assets under management after eight months.
Source: Eric Balchunas
“If IBIT has like $20 billion in assets and that’s considered a failure then what word should be used to describe an ETF [with] $7m in assets?” he said.
Among the top four Bitcoin ETFs in the US, BlackRock’s iShares Bitcoin Trust (IBIT) tops the charts and has had over $20 billion in inflows to date.
Fidelity Wise Origin Bitcoin Fund (FBTC), has nearly $10 billion. ARK 21Shares Bitcoin ETF (ARKB) and Bitwise Bitcoin ETF Trust (BITB), each have roughly $2 billion in net inflows to date.
Another crypto analyst, Bryan Ross, also disagreed with Bianco, arguing, "if most ETF trades are NOT institutional, this means institutions aren’t even here yet, and we could see massive institutional inflows next time FOMO and greed show up.”
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