Blockware BTC analyst Mitchell Askew states that Bitcoin will no longer experience "parabolic" price increases or "devastating" bear markets, as the BTC Exchange Traded Fund (ETF) permanently reduces volatility and changes market dynamics.
"BTC/USD looks like two completely different assets before and after the ETF," the analyst wrote on Friday. The chart he shared shows that price volatility sharply declined after the Bitcoin ETF was launched in the United States in January 2024. The analyst stated:
"The days of parabolic bull markets and devastating bear markets are over. In the next 10 years, BTC will reach $1 million through continuous oscillation between 'rising' and 'consolidation'. It will bore everyone along the way and shake tourists off their positions."
After the Bitcoin ETF was launched in the United States, Bitcoin's price trend shows more calm price fluctuations.
Bloomberg ETF senior analyst Eric Balchunas wrote that the reduction in volatility helps Bitcoin "attract bigger fish and give it a chance to be adopted as currency". The analyst added that the cost of doing so might be the absence of "god candles".
The impact of the Bitcoin ETF on market dynamics continues to be debated by market analysts, as this investment tool further intertwines traditional finance, institutional investors, and the digital asset market.
Bitcoin ETF Changes Cryptocurrency Market Dynamics
The Bitcoin ETF isolates capital into traditional investment tools that currently lack physical redemption and retains funds off-chain.
This capital accumulation can prevent rotation into Altcoins, which was the expectation of cryptocurrency investors in previous market cycles.
In July, the net inflow of Bitcoin ETF broke through the $50 billion mark, although the surge in Bitcoin capital did not translate into increased on-chain activity.
Analysts say retail investors are turning to Bitcoin ETFs and gaining exposure through fund managers or other financial trustees representing them, rather than directly holding BTC.
The demand for paper BTC and products like BlackRock Bitcoin ETF has led the asset management company to accumulate 3% of the total Bitcoin supply, raising concerns about centralization among some market participants.
