Bitcoin ETFs are not to blame for Bitcoin (BTC)’s seismic price drop this month, according to Bloomberg ETF analyst Eric Balchunas.

Tapping a fresh multi-year high of $49,000 on January 11, the launch of several U.S.-based Bitcoin spot ETFs that same day has appeared to mark a definitive local top for the asset, which is down over 18% since.

Yet Balchunas maintains that the launch of these ETFs has been a phenomenal success, and has still had a net positive impact on price action.

“Even with GBTC, ETFs [are] still net buyers of +$1 billion since “dumping” began, so it would be worse without them,” wrote Balchunas to X on Tuesday.

“You need to look to your crypto brethren for the culprits,” he added. “The call is coming from inside the house holmes.”

The Grayscale Bitcoin Trust (GBTC) – the largest and longest-standing of U.S. spot Bitcoin funds – has suffered billions of dollars in outflows since successfully converting into a spot ETF.

Before conversion, shares of GBTC traded at a significant discount to Grayscale’s underlying Bitcoin holdings, growing larger than 40% early last year.

Many savvy investors took advantage of that discount by buying into GBTC early and recorded a massive profit when it was restored to parity after the fund became an ETF.

Now many of those buyers – including the FTX bankruptcy – have chosen to cash out. On Monday, Grayscale suffered its largest daily outflow ever at $640 million, outsizing inflows to all other U.S. Bitcoin ETFs combined at $553 million.

Bright Side Of Bitcoin ETFs

Nevertheless, net flows to all such ETFs remain at $1.07 billion over their first seven trading days.

Even when factoring in outflows from other Bitcoin ETF products like ProShares, Purpose, and European ETPs, funds have earned a respectable $721 million, according to BitMEX Research.

Overall Flow stats for ALL Bitcoin ETPs since 11th Jan 2024:

* New US ETFs: +$4,536m
* GBTC Outflow: -$3,447m
* BITO Outflow: -$143m
* Top 6 European ETP outflow: -$138.8m
* All 23 others Outflow (Rest of Europe, Canada, Brazil etc): -$86m

GRAND TOTAL INFLOW: $721m

— BitMEX Research (@BitMEXResearch) January 23, 2024

The total money held within U.S. Bitcoin ETFs has already topped that within silver ETFs, making Bitcoin the second largest ETF commodity in the country.

Though Grayscale still dominates rival funds, newly launched ETFs from BlackRock, Fidelity, and others now hold 20% of Grayscale’s total BTC. These funds boast far lower management fees around 0.3% per year, versus Grayscale’s 1.5% yearly fee.

Bitcoin remains 75% up over the past 12 months, still outperforming equities and bonds.

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