Bianco Research CEO Suggests Bitcoin ETFs Will Take Time to Drive Widespread Adoption

Jim Bianco, CEO of Bianco Research, a firm specializing in financial market analysis, believes that spot Bitcoin exchange-traded funds (ETFs) require more time to become effective adoption tools. In a recent post on X, Bianco highlighted that despite their launch in January, spot Bitcoin ETFs have not yet fulfilled the high expectations set for them.

1/8

Spot BTC ETFs update

tl:dr
* Inflows now outflows
* Holders have record losses
* Advisors <10% of holdings (boomers never came)
* Avg trade size now <$12k.

It's not an adoption vehicle. Instead a small tourist tool and on-chain is returning to Tradfi.

See posts #4 and #8

— Jim Bianco (@biancoresearch) September 8, 2024

Challenges and Criticisms Facing Bitcoin ETFs

Bianco pointed out that recent outflows, investor losses, and the lack of significant institutional investment suggest that the Bitcoin ETF market may need more time to mature. According to a report from CoinTab, the United States spot Bitcoin ETFs have experienced over $1 billion in net outflows in the past eight trading days. The market for these ETFs now holds about $48 billion in assets, down from a peak of $61 billion in March.

Bianco criticized the ETFs as not being a strong adoption vehicle, noting that most of the recent capital inflows have come from on-chain holders moving their funds back to traditional finance accounts. He believes that the market might not realize its full potential until the next Bitcoin halving in 2028, along with major advancements in blockchain technology.

Diverse Opinions on Bitcoin ETF Potential

Some analysts disagree with Bianco’s analysis. Eric Balchunas, Bloomberg’s senior ETF analyst, countered in a September 8 post on X that Bitcoin ETFs have accumulated billions in assets in just eight months. He implied that if a fund with $20 billion in assets is considered a failure, then an ETF with only $7 million in assets would require a different term to describe its performance, suggesting that $20 billion is a substantial success by comparison.

Crypto analyst Bryan Ross also disagreed with Bianco, suggesting that the lack of institutional trades indicates institutions are not yet active in the market. He predicted that significant institutional inflows could occur when the market experiences future surges of enthusiasm and greed.

Among U.S. spot Bitcoin ETFs, BlackRock’s iShares Bitcoin Trust (IBIT) leads with over $20 billion in inflows. Fidelity’s Wise Origin Bitcoin Fund (FBTC) has attracted nearly $10 billion, while the ARK 21Shares Bitcoin ETF (ARKB) and the Bitwise Bitcoin ETF Trust (BITB) have seen around $2 billion in net inflows each.