Decimal founder says ETF hype could trigger Bitcoin supply shock
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Henry Robinson, founder of Decimal Digital, predicts that as investment inflows into spot Bitcoin ETFs continue to increase, Bitcoin supply may be impacted.
In exclusive commentary from Crypto.news Robinson stated that the Bitcoin ETF is a game changer and is expected to revolutionize the industry by unlocking unprecedented investment opportunities. He said that these financial instruments will attract a large number of new investments from different sectors, including pension funds, endowments, insurance companies, sovereign wealth funds and trust companies investing in Bitcoin.
Robinson’s insight comes after the U.S. Securities and Exchange Commission approved several Bitcoin ETFs, sparking a trading frenzy that reportedly saw a staggering $500 million in trading volume within the first 20 minutes.
Despite the excitement over the initial trading, he sounded a cautious note about Bitcoin’s ability to meet growing demand. A potential “Bitcoin supply shock” could occur, which could cause wild price swings.
Furthermore, Robinson questioned the perceived value of ETFs, claiming they offer no significant advantages over self-custody, especially for long-term holders. He predicts that there will be churn on positions due to fee emissions that could last for years, and that the ETF may become less attractive as Bitcoin adoption escalates and self-custody becomes more attractive among institutions.
Bitcoin hit $49,000 for the first time in nearly two years following the SEC’s historic announcement yesterday. However, the price soon fell to the $46,000 area, reflecting Henry Robinson’s warning of a potential supply hit.
