Bitcoin Record High Would’ve Happened Without ETFs, Just Later, Say Experts

• Bitcoin's latest all-time high on Tuesday morning was accelerated by the launch of the spot bitcoin ETFs, experts said.
• The cryptocurrency started its rally in earnest in the fall of 2023 as it became clearer that the funds would soon be approved.
• Experts said that it would've reached a new all-time high nevertheless, but the ETFs have been an important tailwind.

Bitcoin BTC$91,580.81 reached a highly anticipated new all-time high above $69,000 on Tuesday only two months after the approval and launch of the ten spot bitcoin ETFs. The fast timeline has left people wondering: would the new high have happened so soon if the ETFs hadn’t launched?

No, according to Seth Ginns, managing partner and head of liquid investments at CoinFund. “The new all-time high would have happened without the ETFs, but we’ve likely accelerated this cycle with the ETF flows,” he said.

Even with Grayscale's GBTC losing more than 200,000 from its bitcoin holdings since the ETF launches in January, the spot funds on a net basis have accumulated just shy of 163,000 tokens, according to data from BitMEX. BlackRock's IBIT and Fidelity's FBTC alone hold more than 196,000 bitcoins.

“I definitely think the introduction of the ETF was a significant tailwind and, without it, we wouldn’t be at all time highs,” said Jim Iuorio, managing director of TJM Institutional Services and a veteran futures and options trader.

Iuorio believes that the recent rally is not just ETF-driven, but rooted just as much in the current political landscape, including anticipation that the U.S. Federal Reserve’s will lower benchmark interest rates in the coming months, as well as the end of the Bank Term Funding Program – an emergency platform put in place by the Fed in 2023 to stem what threatened to turn into a banking crisis.

“The bid in all of crypto is a “no confidence” vote for the stewardship of fiat currencies and the potential for the Fed to restart quantitative easing and accommodative policy to assist in a pinch,” said Iuorio.

In addition to the roughly 50% rally in bitcoin since the ETFs came online in January, much of the token's near-tripling in price in 2023 came after BlackRock in June indicated its intention to open a spot fund and Grayscale was victorious in its court case challenging the SEC's rejection of its spot ETF hopes.

“While there are likely multiple factors driving the price of bitcoin right now, there is no question ETFs are playing a starring role,” said Nate Geraci, president of the ETF Store. “The convenience of the ETF wrapper has unlocked a significant new source of demand in the form of retail investors, advisors, and institutional investors who didn’t want to hassle with buying bitcoin directly from crypto exchanges.”