Spot Bitcoin ETF approval in January marked a shift in the crypto industry. Investment bank Architect Partners lauds the product for significantly driving capital inflows in the first half of 2024.

The financial instrument gave institutional players a seat at the table when it delivered BTC to Wall Street. More exposure is expected as Ethereum (ETH) and Solana (SOL) ETFs align. 

BTC ETFs Among Catalysts for $750 Billion Crypto Surge

Architect Partners’ financial report indicates that Bitcoin Spot ETFs have attracted more than $15 billion to the cryptocurrency market since their launch on January 11. This, combined with more than $700 billion in value growth among crypto tokens and over $11 billion in growth among publicly listed cryptocurrency companies, brings total H1 growth to at least $750 billion year-to-date.

The approval of BTC spot ETFs jump-started the industry after the previous bear market instigated by Terra’s collapse and FTX’s implosion in 2022. According to insights by Architect, crypto’s recovery outpaces that of the internet from its crash in 2000.

Read more: What Is a Bitcoin ETF? All You Need to Know

According to the report, this growth signifies a comeback for the industry, with market confidence and momentum increasing.

“The significant influence of BTC Spot ETFs on the digital assets market is evident from the distribution of trading volume throughout the week. From January to June 2024, weekend trading volume accounted for only 16% of the total, the lowest ever recorded for this period (H1 of a year). This indicates increased activity from traditional finance investors, with trading volume concentrated during Monday to Friday. It is particularly strong during US market hours, decreasing after the US market closes,” Matteo Greco, Research Analyst at Fineqia, told BeInCrypto.

Architect Partners’ report also acknowledged increasing “professionalism, risk management, and ethical behavior.” It highlights the spirit of ‘doing it right’ in the industry, adding that these are the foundational principles of crypto.

Analyst Decries Stagnating BTC ETF Flows

Despite the significant contribution to the industry, BTC ETFs’ capital flows have stagnated lately.

“US Bitcoin ETF flows have mostly stagnated. Not seeing tons of inflows, not seeing tons of outflows. Net inflows since launch sits at very healthy $14.7 billion,” wrote Bloomberg ETF analyst James Seyffart.

Seyffart also noted a drop in BTC ETF trading volumes, highlighting that this metric has not hit $3 billion since mid-May. Fineqia’s analyst, Greco, told BeInCrypto that traditional finance investors concentrate their trading volumes between Monday and Friday, focusing on US market hours.

According to data from investment management company Farside Investors, BTC ETFs experienced total net outflows of $13.7 million on Tuesday. This marked a break from five consecutive trading days of positive flows. Grayscale recorded up to $32.4 million in outflows, effectively topping the day’s negative flows.

Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach.

The instrumental role of Bitcoin spot EFTs in driving capital into the crypto industry cannot be overlooked. As they account for 2% of the growth in six months, it becomes imaginable how much more could be achieved with more such financial instruments in the market.

Meanwhile, the market awaits a possible Ethereum (ETH) spot ETF launch within the month. The countdown is also on for a prospective Solana (SOL) ETF following VanEck’s move to pioneer the application in the US.

Retail investors are showing remarkable confidence by buying the dip despite a significant sell-off by a prominent crypto whale. The recent transactions have stirred up the Bitcoin and crypto markets, particularly influencing the market’s short-term trajectory.

Early Thursday in Asian trading hours, Bitcoin’s price plummeted to $57,800, marking a two-month low. Despite this drop, the price recovered up to $59,000 by the time of writing.

Crypto Whale Sold Over $400 Million Worth of Bitcoin

Amidst the Bitcoin volatility, a crypto whale wallet, 3G98j, deposited an eye-watering 1,800 BTC, valued at $106.08 million, into Binance. Hours after the first deposit, the crypto whale again sent 1,800 BTC worth nearly $100 million to the same platform.

Typically, such large deposits to a crypto exchange suggest a potential sale. In the past week alone, this crypto whale has transferred a total of 5,281 BTC—worth around $423 million to Binance.

Despite these considerable sell-offs, the reaction from retail investors has been notably bullish. According to data from Santiment, a behavior analytics platform, the retail sector is aggressively purchasing Bitcoin under the $60,000 mark.

“The crowd is showing signs of seeing this as a buy-the-dip opportunity. Ideally, we wait for their enthusiasm to settle down. The time to buy is when they are impatient and skeptical,” Santiment explained.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Cold Blooded Shiller, a pseudonymous crypto analyst on X (formerly Twitter), echoes this sentiment. He provided a nuanced take on the current market conditions, noting novice traders’ challenges.

“Conditions remain significantly weighted on the downside, and the momentum is all there. Adapting to the side with the momentum is incredibly important, but that doesn’t make it a necessity to trade,” he advised.

Furthermore, Cold Blooded Shiller elaborated on the risks and strategies in current market conditions. He emphasized the need for patience and strategic disengagement, suggesting that many’s best course of action might be to avoid active trading.

“For many of you, sitting on the sidelines and doing other things is the biggest alpha I can bestow upon you,” Cold Blooded Shiller stated.

Moreover, he highlighted the psychological aspect of trading under such volatile conditions. He advised retail traders to let things settle down and reduce their emotions when timing the market, reinforcing the need for strategic patience until the market shows signs of a positive momentum shift.

Read more: Cryptocurrency Trading Courses Tailored for Beginners

The contrast between the crypto whale’s actions and retail investors’ enthusiasm paints a complex picture of the Bitcoin market. While large holders appear to be cashing out, the broader investor base remains optimistic, seeing the lower prices as an attractive entry point.

American entrepreneur and Bitcoin bull Anthony Pompliano has again affirmed his bullish sentiment towards the flagship crypto. This time, he advised investors on what they should be doing during this BTC dip and suggested that there was no need to be concerned despite Bitcoin’s recent underperformance. 

Bitcoin Dips Are For Buying

In an interview with FOX Business, Pompliano mentioned that Bitcoin dips are buying opportunities and that every “great investor” who knows what they have understands they should buy more when prices move against them. He further claimed that anyone questioning whether or not they should be buying more during this BTC dip may actually not know what they own, alluding to Bitcoin’s potential. 

Pompliano made these statements while noting that retail and institutional investors are beginning to realize that Bitcoin is a “resilient” asset that will be worth more in the next five to ten years than it is now. The American entrepreneur also explained how BTC has matured compared to previous market cycles while still achieving impressive growth.

He stated that Bitcoin experienced several 30% and 25% price corrections in the 2017 and 2021 bull runs. However, things have improved in this market cycle, with the flagship crypto only experiencing price drawdowns of about 15%. He claimed that this shows that BTC’S volatility is dampening. 

Meanwhile, he also noted that BTC has the Spot Bitcoin ETFs in this market cycle, which was lacking in the previous bull runs. He believes these funds will be a major catalyst for Bitcoin’s run heading toward year-end. Pompliano predicts that Bitcoin can hit a new all-time high (ATH) before the end of 2024.

However, he warned that BTC may no longer appreciate as high or as fast as it used to now that institutions are invested in the flagship crypto through the Spot Bitcoin ETFs. He again remarked that this is because the entrance of these institutional investors has dampened Bitcoin’s volatility. 

Thoughts On The Spot Ethereum ETFs

Pompliano also gave his thoughts on the Spot Ethereum ETFs and when they could begin trading. He stated that these funds will likely start trading sometime this summer. He added that they could begin trading sooner rather than later based on rumors that the Securities and Exchange Commission (SEC) is close to approving these funds. 

He believes that Ethereum has a problem that BTC doesn’t and suggests that this could negatively impact the amount of inflows that the Spot Ethereum ETFS attracts. According to Pompliano, Bitcoin has a single narrative as it is known as a ‘store of value’, which he believes has been enough to convince investors to invest in the flagship crypto. 

On the other hand, he said that Ethereum has many narratives, which creates a confusing story for the second-largest crypto token by market cap. He noted that this could be a big problem for the Spot Ethereum ETFs since institutional investors could easily be confused by what Ethereum is about and opt against investing in these funds. 

Featured image created with Dall.E, chart from Tradingview.com