Bitcoin spot ETFs have become an integral part of the cryptocurrency ecosystem within just four months of their launch on the US financial markets.
Eric Balchunas, an ETF specialist at Bloomberg, explained that investors should not get emotional about observed changes in short-term flows.
May covers April losses:
These products received the green light from the US Securities and Exchange Commission in mid-January, sparking chaos upon launch, as volatility increased and the price of Bitcoin reached an all-time high within two months.
But in March, this trend began to change, especially in late April and early May, when the seven-day period from April 24 to May 2 saw outflows exceeding $1.2 billion.
The price of Bitcoin was expected to decline during this period, falling to a multi-month low of less than $57,000.
However, those rainy days are behind us, and ETFs began attracting huge inflows last week.
Eric Balchunas confirmed that inflows in May, which amounted to $1.3 billion, covered all the losses witnessed in April.
This may be the reason behind the rise in the price of Bitcoin by about ten thousand dollars, currently reaching $67,000.
Keep emotions aside:
Although recent filings with the US Securities and Exchange Commission revealed the entry of several large entities into the Bitcoin ETF scene, such as Morgan Stanley, the Wisconsin State Investment Board (SWIB), and Bracebridge Capital, These products also attract a certain group of retail investors who tend to make emotional decisions about buying and selling assets.
For this reason, Balchunas cautioned against getting emotional, explaining that these inflows and outflows are a normal part of the life of ETFs.
It is believed that it will become a net positive in the long term, and this appears to be the case now with over $12 billion already injected.
