Maximizing Bitcoin Profits with ETF Data

Since the introduction of Bitcoin Exchange Traded Funds (ETFs) in early 2024, Bitcoin has reached new all-time highs, with several months of double-digit gains. As impressive as this performance is, there is a way to significantly outperform Bitcoin’s returns by using ETF data to guide your trading decisions.

Bitcoin ETFs and their influence

Launched in January 2024, Bitcoin ETFs have quickly amassed large amounts of Bitcoin. These ETFs, followed by several funds, allow institutional and retail investors to gain exposure to Bitcoin without owning it directly. This ETFs have accumulated billions of dollars in BTCand tracking this cumulative flow is essential for monitoring institutional activity in the Bitcoin markets, allowing us to estimate whether institutional players are buying or selling.

Figure 1: BTC ETF (USD) cumulative flows have exceeded $18.5 billion.View live graph 🔍

ETF daily inflow denominated in BTC indicate that large-scale investors are accumulating Bitcoin, while the daily outflows suggest that they are exiting their positions during that trading period. For those looking to surpass Bitcoin’s already strong performance in 2024, this ETF data provides a strategic entry and exit point for Bitcoin trades.

Figure 2: BTC ETF Daily Flows (BTC) show regular accumulation of over 10,000 BTC per day.View live graph 🔍

A simple strategy based on ETF data

The strategy is relatively simple: buy Bitcoin when ETF inflows are positive (green bars) and sell when outflows occur (red bars). Surprisingly, this method can help you outperform even during Bitcoin’s bullish periods.

This strategy, while simple, has consistently outperformed the broader Bitcoin market by capturing price momentum at the right times and avoiding potential downturns by following institutional trends.

Figure 3: Each transaction follows this institutional inflow/outflow strategy.

The power of compounding

The real secret of this strategy lies in compounding. By compounding gains over time, you significantly increase your returns, even during periods of consolidation or low volatility. Imagine you start with $100 in capital. If your first trade yields a 10% return, you now have $110. On the next trade, another 10% profit on €110 brings your total to €121. By combining these gains over time, even modest gains can accumulate into significant profits. Losses are inevitable, but the compounding gains far outweigh the occasional dip.

Since the launch of the Bitcoin ETFs, this strategy has delivered over 100% returns over a period where holding BTC has returned around 37%, or even compared to buying Bitcoin on the ETF’s launch day and selling it on the exact highest point ever. , which would have yielded approximately 59%.

Figure 4: More than 100% compounded gains since ETF launch using this strategy.

Can more profits be expected?

Recently we started seeing one continued trend of positive ETF inflowsindicating that institutions are again heavily accumulating Bitcoin. Since September 19, there has been a positive inflow every day, which, as we can see, often preceded price increases. BlackRock and their IBIT ETF alone have amassed over 379,000 BTC since inception.

Figure 5: BlackRock alone has amassed over 379,000 BTC in just a few months.View live graph 🔍

Conclusion

Market conditions can change and there will inevitably be periods of volatility. However, the consistent historical correlation between ETF inflows and Bitcoin price increases makes this a valuable tool for those looking to maximize their Bitcoin profits. If you’re looking for a low-effort, set-it-and-forget-it approach, buy-and-hold may still be suitable. However, if you want to try to actively increase your returns by using institutional data, tracking Bitcoin ETF inflows and outflows can be a game-changer.

For a more in-depth look at this topic, watch a recent YouTube video here: Using ETF Data to Outperform Bitcoin (Must Watch)

By newadx4

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