ANALYSIS: ETFs from giants like BlackRock and Fidelity Investments provide essential needs that can moderate price volatility

Earlier this week, Bitcoin was on a downward spiral, sparking fears of an outflow of money from U.S. exchange-traded funds. However, buyers on the downside have flooded into cash, a pattern that, in some ways, suggests that bitcoin will be less volatile in the long run. A net inflow of $737.5 million into 11 spot U.S. bitcoin ETFs in the four days through Thursday stabilized the bitcoin price at around $58,000. Previously, the bitcoin price fell to $53,602 on July 5 due to a sell-off in seized tokens and concerns about the disposal of tokens by creditors of the bankrupt Mt. Gox exchange. Market participants believe that ETFs from giants such as BlackRock and Fidelity Investments provide the underlying demand that can moderate price volatility. These six-month-old portfolios have amassed about $51 billion in assets, more than 4 percent of bitcoin's supply, with hedge funds and wealth advisors being the main holders. These specialized institutions stand in stark contrast to individual investors who were attracted to cryptocurrencies as get-rich-quick deals in earlier years.