JPMorgan: Bitcoin ETFs have less and less influence on the price

At the beginning of the year, the first spot ETFs for Bitcoin (BTC) were approved in the USA. It was a huge step for Bitcoin and the broader crypto market, as such ETFs were considered something of a holy grail for years. Given the record inflows of investment into Bitcoin ETFs, one can suspect that we are at a pivotal moment that could shape the future of the crypto sector. Although according to JPMorgan, the world’s largest investment bank, the influence of ETFs is slowly decreasing.

Record inflows for BTC

Last week, Bitcoin products experienced unprecedented growth. With inflows of more than $2.45 billion, these funds have achieved growth not seen since 2021. This phenomenon clearly shows that traditional investors are increasingly interested in Bitcoin and trust in the cryptocurrency is greater than ever.

The spot ETFs, particularly those managed by asset managers BlackRock and Fidelity, have amassed nearly $11 billion in assets under management (AUM). This is of course a huge amount and has certainly influenced the price of BTC. Of course, if so much Bitcoin is purchased, the Bitcoin price will also rise.

The decreasing correlation

According to JPMorgan, an interesting observation in this development is the decreasing correlation between the price of Bitcoin and flows into and out of spot ETFs, reports CoinDesk. JPMorgan analyst Ken Worthington noted that this correlation has fallen to 0.60, a significant decline from the peak of 0.84 in January.

It could therefore be that the time when large inflows into ETFs drove prices higher may be over, at least if JPMorgan is to be believed. Nevertheless, the ETFs continue to perform well. This week, for the first time, we saw a net outflow in one day, but this was followed by another (larger) inflow.

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Even if the positive effect will fade in the short term, the bank says the introduction of spot ETFs remains an extraordinarily significant milestone with consequences that may only become truly visible in the long term.

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