ETFs Make Bitcoin’s Problems Even Worse – WSJ

The pitch now being made by many, including Laurence Fink, chairman and CEO of BlackRock, one of those launching an ETF, is that bitcoin should be digital gold, holding its value in a crisis.

So far there’s zero evidence that bitcoin works as digital gold. And bitcoin ETFs are likely to make its bad performance in crises even worse, by bringing in even more speculators to what’s already mostly a speculative asset.

In both the bank runs of March 2023 and the pandemic panic of March 2020, bitcoin proved to be digital fool’s gold, plunging at the first sign of trouble. From its February 2020 high to the low a month later it halved, while the S&P 500 lost a third of its value from high to low and gold fell 6%. In 2023’s bank runs, bitcoin lost almost 20% from its February high to the March low, four times as much as the S&P. Gold lost just 1%.

Source: ETFs Make Bitcoin’s Problems Even Worse – WSJ