As Bitcoin continues to initiate a major price recovery, market strategist and investor Joao Wedson has a in depth research on how BTC Exchange-Traded Funds (ETFs), in particular the German investment fund ETC Group Physical Bitcoin (BTCE), can influence the price of the cryptocurrency. His research comes at a crucial time, when investors are closely monitoring events and developments that could impact BTC’s long-term prospects. short term.

Correlation between BTC ETF and Bitcoin price

The introduction of the Bitcoin ETFs marked a major milestone for BTC and the cryptocurrency landscape, sparking major rallies in the market. However, crypto investor Joao Wedson has broken down the products’ connection to BTC’s price, pointing to recent trends and changes in the fund’s behavior.

Wedson emphasized the topic, noting that German investment fund ETC Group Physical Bitcoin with the ticker BTCE has been gradually reducing its BTC holdings after introducing BTC ETFs. He further mentioned that the fund is historically correlated with the movements in BTC, and drew attention to a scenario in 2020.

According to the expert, in 2020 the company expanded its positions from 0 to 23,480 BTC, and at the same time the crypto asset experienced its first historic peak in April 2021. As the company’s BTC holdings began to decline, in most cases the price of Bitcoin also fell.

Currently, the company’s reserves, which peaked at 27,980 BTC in January 2024, have since declined and currently stand at less than 17,000 BTC. This simply means that the German ETC Group has been reducing its positions on a daily basis. However, despite the constant reduction in holdings, the expert stressed that the impact on the value of BTC has not been significant compared to the previous scenario.

Additionally, Wedson, including a 30-day variance study, stated that while negative variances are typically associated with local lows and price declines, positive variances are associated with an increase in the price of Bitcoin“The exception is the most recent move, where Bitcoin rose while the fund continued to liquidate its positions and has been doing so ever since,” he added.

As investors deal with BTC’s volatility, Wedson emphasizes the need to monitor the fund’s performance and the effects of these changes on Bitcoin’s price to better understand emerging correlations and market patterns.

Mass Adoption of BTC Amid Market Uncertainty

While retail investors are selling en masse, Bitcoin For Freedom, a crypto enthusiast, quoted an increase in BTC adoption at the institutional level.

According to the enthusiast, now that the general public is selling, more than 1 million spot ETFs have been purchased BTCMichael Dell Discusses BTC, Goldman Sachs Owns $500 Million in BTC, Blackrock ETF Bought Over 5,000 BTC in 5 Days, and More.

Main image from iStock, chart from Tradingview.com