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Bitcoin ETFs Are Removing Liquidity From the Free Market

Kir says that ETFs are a good development. I disagree — I believe that, for the crypto market overall, this is actually harmful. Bitcoin ETFs and passive strategies are pulling BTC out of the public, free market liquidity pool.

In my view, the rise of spot Bitcoin ETFs concentrates supply off-exchange into custodial vehicles, reducing on-chain circulation and weakening price discovery. That shift in market structure creates concentration and counterparty risks for Bitcoin and the broader crypto market.

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AI Analysis

The core of the opinion is that spot Bitcoin ETFs and related passive investment strategies absorb units of BTC and hold them in custodial accounts, effectively removing supply from exchange order boo...

AI Recommendation

Given these dynamics, I would avoid initiating new long positions based solely on ETF narratives until the market structure's effects on liquidity and price discovery become clearer. The ETF-driven re...

Disclaimer

The AI analysis and recommendations provided are for informational purposes only. Any investment decisions should be made at your own risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions.

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