Bitcoin falls 2.5% as flows continue to point to a disappointing ETF launch

<p>It's beginning to dawn on some people that spot ETFs won't be a white knight for the bitcoin market.</p><p>We're midway through the fourth day of bitcoin ETF trading and the results aren't anywhere near the +$2 billion the bitcoin bulls were touting in the first 48 hours. The path to a net +$15 billion by year-end or the $100 billion touted by Standard Chartered has considerably dimmed as well.</p><p>There are people who want to argue that these ETFs are a great triumph because they are better than the hundreds of ETFs launched annually that are dead-on-arrival but that's not the bar for success is high in light of a rally in BTC from $28K to $49K on the ETF hype.</p><p>So far, the only trade has been money cycling out of the high-fee GBTC and futures-based BITO into the new lower fee ETFs. Net of GBTC, here are the inflows:</p><ul><li>Day 1 +625.8m</li><li>Day 2 +193.1m</li><li>Day 3 -81.0m</li></ul><p>So just three days in we're already at net outflows and that doesn't even include BITO, whose AUM is down around $300m.</p><p> For instance, ARKK itself sold its BITO holdings to buy its own ETF yesterday. That flatters its own ETFs performance but it also masks the lack of real demand.</p><p>What's insane to me is that no one in the bitcoin space will call it what it is. There is such an echo-chamber built up around the space that there's no room for rational analysis.</p><p>The thing is, people are getting hurt here by those touting some kind of great success from $600m dollars into an $800 billion market. Others are shamelessly extrapolating inflows from the first two days of trading to infinity to make a bullish case. That's ridiculous as the long history of modern ETF launches shows that the first two days are like the weekend box office of a movie.</p><p>I don't you need to look beyond volumes to paint a more-accurate picture:</p><p>Now maybe the caveat here is that price has been falling so inflows aren't happening. That's fine, they will come at some point but I just don't see a path to $100B in net AUM here.</p>

This article was written by Adam Button at www.forexlive.com.