Despite the recent approval of Bitcoin Spot ETFs, of Bitcoin its performance remained lackluster. Julian Hosp, CEO of Cake Group, shed light on this unexpected trend and attributed it to three main factors.
According to Hosp, the most notable reason for Bitcoin’s underperformance is the sales of Grayscale Bitcoin Trust (GBTC). Sales have already approached $600 million and are expected to continue increasing. Hosp argued that he repeatedly emphasized in his videos that these sales were likely to reach billions of dollars. The CEO says that the re-emergence of the GBTC price reduction is a clear indicator of this trend.
Secondly, according to Hosp, there is no significant demand for Bitcoin as an ETF in the short term. Hosp states that funds, individuals and companies prefer spot purchases when purchasing Bitcoin. According to the CEO, most are pure Over-the-Counter (OTC) swaps that do not create direct buying pressure. However, Hosp believes this situation will change in the long term.
Thirdly, according to Hosp, the blocking of ETFs by institutions such as Vanguard and the attitude of US Securities and Exchange Commission Chairman Gary Gensler towards Bitcoin also play an important role in the underperformance of the BTC price. CEO is typical of traditional Wall Street investors who tend to invest in ETFs rather than Bitcoin directly cryptocurrency community and are more sensitive to the views of authorities such as Gensler.
Hosp concludes his analysis with a warning:
“Many people expect too much from ETFs in the short term and underestimate their potential in the long term.”
*This is not investment advice.
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