Askew penned his thoughts in a recent post, stating, “The Bitcoin market now seems to be divided into two different eras—before and after the introduction of the ETF.” His charts displayed a significant decrease in price volatility post the launch of the Bitcoin ETF in the US in January 2024.

He further elaborated that Bitcoin is likely to reach $1 million in the next decade through a steady cycle of ‘pump and consolidate’ rather than massive jumps or falls. This process, though less exciting, is likely to weed out short-term investors.

Eric Balchunas, a Senior ETF Analyst at Bloomberg, agreed to a certain extent, asserting that this reduced volatility is beneficial as it draws in larger investors and gives Bitcoin a stronger opportunity to be embraced as a currency. However, the downside is the potential disappearance of skyrocketing price jumps or “God Candles,” as Balchunas termed it.

While the impact of Bitcoin ETFs on market trends is still under discussion, it’s evident that these financial instruments are bridging the gap between traditional finance, institutional investors, and digital asset markets. This also affects the rotation of funds into altcoins, a common occurrence in previous market cycles.

In July, the net inflows to Bitcoin ETFs surpassed $50 billion, although this influx of capital did not reflect in increased on-chain activity. Many retail investors are opting for Bitcoin ETFs to gain exposure via traditional financial instruments managed by fund managers or other financial fiduciaries, rather than holding BTC directly.

This growing demand for paper BTC and products like BlockRock’s Bitcoin ETF has led to the asset manager holding 3% of Bitcoin’s total supply, sparking concerns regarding centralization among some market commentators.

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