The Bitcoin ETF was an important milestone in crypto. Why? A lot of newcomers in crypto don’t really understand the importance of this. A bit of history, bitcoin actually just used to be this weird internet money thing that normal everyday people used to buy. Yes you could get the odd rich person here and there buying a tonne of it, but for the most part it was just everyday people buying it. You actually could get some for free for a period of time on a faucet website!

So why is the ETF important. And ETF allows a whole different class of buyers to enter the market. Think pension funds, corporations etc. Companies aren’t just your everyday person than Yolos on memecoins. They have entire teams dedicated to risk management(essentially spotting potential risks to an organisation). It used to be a taboo thing for companies to have any exposure to crypto because of the high risk nature. Holding it on your balance sheet immediately exposes your stock to high volatility because your assets held are in correlation to swings in crypto pricing. Heck even crypto companies struggled to get bank accounts as recent as 2023. The Bitcoin ETF made BTC legitimate in the corporate world.

Why is this important? It shows that this cycle is very different from others. BTC’s rise was not due to retail investment like past cycles. BlackRock has bought more BTC than even Michael Saylor’s MicroStrategy. And ETF inflows per day at some point outpaced the number of bitcoin mined per day. Usually in retail driven markets, retail buys Bitcoin first and when they stop realising high returns, they then buy altcoins. As you may have noticed, many alts excluding AI tokens have massively underperformed against BTC, something that hasn’t happened in previous cycles. This is because institutions invest on a longer timeframe than retail driven markets. BTCs rise is solely ETF driven. Many investors don’t invest in Bitcoin at all, they see the price tag as being too high.

I’m still bullish on alts and I’ll explain in an upcoming post tomorrow why. For now I’m out of characters..