Coinbase report: Bitcoin spot ETF fund direction may have more impact on price than halving event

Mars Finance News, according to the Coinbase x Glassnode Q2 report, compared with past halvings, the current market dynamics of Bitcoin have matured significantly, which may reduce the direct impact of newly produced Bitcoins on market prices. This change is primarily driven by increased institutional demand and widespread adoption of Bitcoin ETFs, with key differences including:

-While miners add around 900 Bitcoins to the market every day, Bitcoin ETFs tend to buy more, significantly affecting supply levels and market liquidity;

-In addition, ETFs may generate large inflows and outflows, affecting market volatility. These changes can significantly affect price stability and market sentiment, often independently of traditional supply and demand constraints. In short, ETF flows have had a significant impact on Bitcoin’s availability and demand, and will continue to do so for the foreseeable future. Given these factors, ETFs are key players in the market and their activity may mask the historical impact of halvings. For traders, this means that ETF trends may provide key data points for making informed decisions, as market behavior may no longer be predictable after the halving.

The report also states that spot Bitcoin ETFs are the fastest-growing ETFs ever. A small allocation to cryptocurrency can significantly improve risk-adjusted returns. From April 2019 to March 2024, the traditional 60/40 return was 33.3%. But adding just 3% of cryptocurrencies increases returns to 52.9%; adding 5% of cryptocurrencies increases returns to 67.0%.