KEY POINTS
- Jim Bianco noted how the total assets in Bitcoin ETFs have plunged to $46 billion from a peak of $62 billion in June
- Bianco said that instead of a tradfi adoption tool, BTC ETFs became a "small tourist tool"
- Some crypto users said Bianco's call was too early, and others disagreed with his adoption projection
Spot Bitcoin exchange-traded funds (ETFs) were the biggest story in cryptocurrency innovation and development this year after the U.S. Securities and Exchange Commission (SEC) approved them for trading in January.
Some eight months since their approval, BTC ETFs appear to have lost steam as the total assets across all funds are now down to $46 billion, as per data from Jim Bianco, founder of global economy and financial markets research firm Bianco Research.
Bitcoin ETFs in Downward Trend?
Bianco's charts posted Sunday on X showed that spot BTC ETFs started off at $30 billion in assets in mid-January. By Feb. 22, the funds were at $60 billion. Before May, the ETFs' assets plunged below $50 billion before climbing to a peak of $62.55 billion early in June.
In less than three months, the assets in all spot Bitcoin ETFs plummeted to $46 billion, marking the lowest asset figure since Feb. 12, as per Bianco's presented data.
2/8
— Jim Bianco (@biancoresearch) September 8, 2024
* Total assets in all Spot BTC ETFs are now $46B.
* Down from its June leak of $62B.
* The $46B asset total is the lowest since February 12 pic.twitter.com/oPVknqvDr7
BTC ETFs Not as They Were Painted to be?
Bianco then raised the question that some analysts previously asked – are the funds actually are "adoption vehicle" for traditional finance (TradFi)? For Bianco, spot Bitcoin ETFs are "a small tourist tool" instead of a driver for broader crypto adoption among traditional finance consumers as it was taunted to be ahead of the SEC's approval.
1/8
— Jim Bianco (@biancoresearch) September 8, 2024
Spot BTC ETFs update
tl:dr
* Inflows now outflows
* Holders have record losses
* Advisors <10% of holdings (boomers never came)
* Avg trade size now <$12k.
It's not an adoption vehicle. Instead a small tourist tool and on-chain is returning to Tradfi.
See posts #4 and #8
He went on to provide data that shows the average trade size of BTC ETFs are a "small fraction" compared to the average trade size of other non-crypto ETFs.
6/8
— Jim Bianco (@biancoresearch) September 8, 2024
How does the Spot BTC ETF average trade size (black) compare to other popular ETFs?
It is a small fraction of their sizes. pic.twitter.com/pqlP0DJfX5
Finally, Bianco concluded that after some eight months of trading, spot Bitcoin ETFs "have not become a tool for tradfi or boomer adoption." He said investment giant BlackRock has confirmed this "by saying that 80% of IBIT's inflows are from self-directed online accounts."
8/8
— Jim Bianco (@biancoresearch) September 8, 2024
Concluding thoughts
The SPOT BTC ETFs have NOT become a tool for tradfi or boomer adoption.
Blackrock confirms this by saying that 80% of IBIT's inflows are from self-directed online accounts.
Crypto-quant analysis suggests that most Spot BTC ETF inflows were from…
"So far these instruments have not lived up to the hype of 'here come the boomers.' Very few have come, and those that have are holding losses and may now be leaving ($1B outflows over the last 8 days)," he reiterated.
Can BTC ETFs Still Be Used for Adoption?
Bianco clarified that Bitcoin ETFs can still be utilized to drive adoption among the boomer generation, but not this year, but "maybe" after the next BTC halving, which will occur sometime in 2028.
He also believes that it can be a driver for adoption among boomers after on-chain tools experience "significant development," namely across decentralized finance (DeFi), non-fungible tokens (NFTs), on-chain payments, and more.
Others Beg to Disagree
Some cryptocurrency users on X were not so pleased with Bianco's presentation, with one noting that it was an early call, saying financial markets are experiencing their lowest volume in two decades.
For Cameron Macgregor, the CEO of Wyoming-based Ad Actum Capital, Bianco made a good presentation. However, he disagreed with the analyst's adoption timeline projection. "Adoption will be far faster bc of structural macro-issues," he argued.
Good post, but adoption will be far faster bc of structural macro-issues: bankruptcies, auction failures, sticky inflation, war, recession...
— Cameron Macgregor (@ceamac) September 8, 2024
As fiat-system fails BTC use-case will resurface and BTC will decouple from stocks. Gold's surge suggests we are closer than most think.
Senior Bloomberg ETF analyst Eric Balchunas didn't have much to say but commented with a laughing GIF on a post that cited Bianco's Sunday analysis on Bitcoin ETFs.
Spot Bitcoin ETFs have been on an outflow streak for over a week now, with a single-day outflow of a staggering $287.8 million and most other days with over a hundred million lost, data from Farside Investors showed.
