The Bitcoin ETF market has shown significant movements in recent months. While Bitcoin has struggled to stay above $98,000, discussions about potential market manipulation have become more frequent. At the same time, institutional players are buying Bitcoin en masse through ETFs, reducing the influence of retail investors. But what does this mean for the market, and is there really evidence of manipulation?

Are Bitcoin ETFs a Tool for Market Manipulation?

Some analysts, such as James CryptoGuru, claim that Bitcoin ETFs are being used to manipulate the market. According to him, large players artificially lower Bitcoin‘s price during traditional market closures to liquidate leveraged traders. This would allow them to accumulate Bitcoin and Ether at a lower price before the market rebounds.

While this scenario sounds plausible, it also carries risks. The crypto market operates 24/7, and macroeconomic developments or news can influence prices at any time. Moreover, there is no concrete evidence that coordinated groups, such as ‘whale chat groups‘, actively manipulate the market. Large orders and automated trading bots can impact prices in the short term, but they do not guarantee a sustained trend.

In the traditional financial world, giants such as BlackRock, Vanguard, and Fidelity have a similar impact on stock markets. With a combined $29 trillion in assets under management, their trading decisions can significantly influence market movements. However, this does not necessarily mean they manipulate the market—rather, their capital flows are simply large enough to cause price shifts.

Institutions Seizing Control of Bitcoin ETFs

While some traders speculate about market manipulation, data shows that institutional investors are becoming increasingly dominant in the Bitcoin ETF market. In the last quarter of 2024, their share of Bitcoin ETFs increased from 17% to 28%, amounting to $38.7 billion in BTC positions. Analysts expect this percentage to rise further to 40% in 2025, similar to the gold market.

Institutional investors acquired 893,000 BTC through ETFs, funds, and businesses in 2024. Meanwhile, retail investors and governments collectively sold approximately the same amount of BTC. This suggests a possible power shift within the Bitcoin ecosystem, where major financial institutions are gaining increasing control over the market.

The question remains how this growing institutional dominance aligns with the core principles of crypto: decentralisation and financial autonomy. Some investors worry that Bitcoin is becoming an extension of the traditional financial system, while others believe that institutional adoption will enhance Bitcoin‘s acceptance and stability in the long run.

What Does This Mean for Crypto Investors?

For crypto traders and investors, this development primarily means that the market remains dynamic. The rising influence of institutional players could lead to reduced volatility and greater mainstream acceptance of Bitcoin as a serious asset. At the same time, it also suggests that retail investors may play a less dominant role in price formation.

While speculation about market manipulation is intriguing, concrete evidence remains elusive. What is certain is that Bitcoin ETFs are becoming an increasingly significant part of the broader crypto ecosystem. Whether this will ultimately be a positive or negative development depends on how the market continues to evolve.

Disclaimer: This is no financial advice. Always consider your own investigation and professional advice.