Bitcoin Price: Why It’s Not Going Up Despite ETFs


Despite the influx of over $5 billion in new assets through Exchange-Traded Funds (ETFs) by BlackRock and Fidelity, the Bitcoin price has fallen by 13%. Fred Krueger, the former founder and chairman of Traffic Marketplace, offers insights into this seemingly paradoxical situation.

Arbitrage Traders’ Strategy

In late June 2023, arbitrage traders anticipated the ETF launch and put on Long GBTC, short BTC Futures trades. This initially had a negative impact on Bitcoin’s price, masked by the overall market rally. However, it closed the discount on Grayscale Bitcoin Trust (GBTC) and increased open interest on the Chicago Mercantile Exchange (CME).

ETF Approval and Strategy Shift

Once the ETFs were approved, arbitrage traders shifted their strategies. They sold GBTC for BTC and bought Futures, leading to a decrease in open interest on CME.

Composition of New ETF Demand

About $1.5 billion of the $5 billion in new ETF demand was recycled from GBTC in tax-neutral accounts, looking for lower fees. This reallocation of existing investments did not represent fresh capital entering the Bitcoin market.

External Market Pressures

The selling of $1 billion worth of GBTC by Sam Bankman-Fried (SBF), founder of FTX, and the unwinding of arbitrage positions also influenced the broader market reaction.


Despite the substantial buying activity spurred by the new ETFs, the broader market reaction was influenced by a combination of factors, including the FTX selling and the unwinding of arbitrage positions. Krueger remains bullish, predicting a potential 50% increase in Bitcoin’s price over the next 30 to 60 days.