Bitcoin ETFs Are A Bust One Week In: Why This Analyst Says 'R-E-L-A-X'

Like the first crypto-carrying moon lander, the first week of Bitcoin BTC/USD exchange-traded funds proved to be a bust.

Two funds, BlackRock Inc. BLK and ProShares, surpassed the $1 billion mark in assets under management, but the much-anticipated Bitcoin price surge remained elusive.

As "Mad Money" host Jim Cramer put it: “Nasty beginning to the bitcoin selloff. Someone's probably going to try to make a stand here but... you can't have an asset double in value by hundreds of billions of dollars in anticipation of an ETF and then almost no one shows up."

While many investors continue to grow frustrated — especially Friday with the cryptocurrency's price falling below the key $42,000 level — analysts are urging patience.

James Seyffart of Bloomberg took to social media to remind his followers what a "healthy ETF growth" pattern looks like.

His chart of Buffer ETF AUM illustrates gradual climbs over meteoric surges.

Here's a chart of the asset growth for the most successful new ETF category of recent years (in my opinion). Buffer ETF AUM (aka Defined Outcome ETF assets). For those thinking the #Bitcoin ETF launches were a flop.

R-E-L-A-X

Give it time. Healthy ETF growth looks like this: pic.twitter.com/4kAp4vfoZJ

— James Seyffart (@JSeyff) January 18, 2024

"Such an odd phenomenon," Nate Geraci, President of ETFStore, observed.

"ETFs simply provide a new avenue for exposure, not a price guarantee."

The excitement about the launch isn't entirely extinguished, however.

Eric Balchunas, Senior ETF Analyst for Bloomberg, points to a surge in trading volume for newer ETFs, a potential indicator of sustained interest.

He warns against concluding short-term dips, calling it a "good sign" for long-term prospects.

But the frustration Mike Alfred's tweet reports about reflects the sentiment of many who envisioned a skyrocketing price with the ETF arrival.

"This may not be the bottom," he cautions, "but we are close."

Read Also: Bitcoin Slips Below $41,000 After Jim Cramer's 'Far From The Bottom' Tweet: What Happened To 'Inverse Cramer'?

Key Points To Remember For Investors

So, where does this leave us?

The initial euphoria may have given way to reality, but it's crucial to avoid oversimplification.

Here are some key takeaways:

• ETF Adoption is Real: Reaching $2 billion in AUM within a week demonstrates significant demand for this new investment vehicle.
• Price Volatility Expected: Bitcoin's history is one of wild swings, and ETFs won't change that overnight.
• Long-Term View Matters: Focus on the potential of ETFs to democratize access to Bitcoin and create a more mature crypto market, not short-term price movements.

The Bitcoin ETF story is just beginning.

While the first chapter didn't deliver the fairy tale ending some craved, it opened the door to a fascinating journey of market evolution and potential growth. 

Don't get caught up in the immediate market swings, watch the plot unfold with a cool head and informed perspective.

Read Next: Raoul Pal Spills Secrets: How To 'Make Life-Changing Money' In Crypto Within 2 Years