- ETF adoption reduces Bitcoin volatility, encouraging broader institutional participation and more stable price action.
- Analysts link ETF inflows directly to price growth, projecting potential targets near $199,000.
- Major sell-offs no longer shake Bitcoin prices, showing a resilient market shaped by steady institutional demand.
Bitcoin’s historical volatility is undergoing a significant change. Bloomberg analyst Eric Balchunas has noted that large price spikes, commonly known as “God candles,” are becoming less frequent. The shift is largely attributed to the approval and growing influence of spot Bitcoin exchange-traded funds (ETFs), which have attracted institutional investors and altered market behavior.
According to Balchunas, the approval of ETFs like BlackRock’s IBIT has created a more stable trading environment. Since the launch of IBIT, Bitcoin has increased by 250 percent, but with noticeably reduced volatility. Balchunas emphasized that this shift signals a new phase for Bitcoin, where the focus turns from erratic gains to sustainable growth. He highlighted that these changes could position Bitcoin more as a usable currency rather than merely a speculative asset.
Institutional Activity Reduces Wild Swings
Unlike earlier market patterns, Bitcoin no longer responds sharply to major sell-offs. The recent sale of 80,000 BTC by Galaxy Digital had minimal impact on price levels. Market observers now see consistent buying activity from large entities keeping prices within a tighter range. Current price movements remain stable between $116,000 and $120,000, a contrast to previous double-digit fluctuations.
Experts believe ETF-driven capital inflows will continue to drive Bitcoin prices higher, despite the decline in dramatic surges. Citigroup analysts forecast Bitcoin could hit $199,000 before the end of the year. Their analysis points to a direct correlation between ETF inflows and price increases. For every $1 billion added to ETFs, Bitcoin’s price could rise by approximately 3.6 percent.
Whale Activity Shifts as Institutions Dominate
While institutional investors gain ground, longtime Bitcoin holders are gradually exiting. Market analyst Scott Melker observed that early whales are cashing out, likely influenced by the shift toward institutional ownership. As ETF-managed assets rise, traditional holders are reassessing their positions in a maturing market.
