Alternative investment vehicles such as exchange-traded funds (ETFs), led by BlackRock’s IBIT, have an impact on Bitcoin’s price. This is now well known.
But another ETF in the betting world has been growing in tandem with Bitcoin There is an interesting pattern in the cycle since 2020 that, to the naked eye, seems to show a leading signal of a change in BTC trend.
That ETF is the Roundhill Sports Betting & iGaming ETF (BETZ), which is listed on the New York Stock Exchange. The fund first launched in June 2020 and has since attracted just $98 million in net inflows. As of Tuesday, it had about $50 million in assets under management, a pittance compared with the billions in IBIT funds.
At press time, the 90-day correlation between the two assets was 0.73, according to TradingView. Meanwhile, the 365-day coefficient is 0.91. This means that R² is about 0.83, which means that more than 80% of the changes in the two assets are statistically related. Talk about marching in lockstep!
But here’s where it gets interesting. If you overlay the ETF price onto a BTC price chart, a clear pattern emerges, with the fund tending to hit major peaks and bottoms weeks before the Bitcoin market reverses.
The blue line represents Bitcoin and the white line represents the BETZ ETF.
The bet ETF peaked in September 2021, and when BTC peaked in November, it had already begun to decline. The ETF eventually bottomed in September 2022, three months before Bitcoin.
A similar pattern emerged last year, when the ETF peaked in August, two months before BTC.
While the correlation between the two assets is far from a definitive cause-and-effect relationship, the consistency of these time shifts across multiple cycles is hard to ignore. It reinforces the broader argument made by several leading observers, including Ray Dalio, that Bitcoin is still behaving more like a risk-sensitive macro asset than a traditional safe haven.
For traders, the takeaway is clear: the ETF is more of a complementary sentiment and liquidity proxy than an independent predictor of BTC trends.
The fact that the BETZ ETF has decoupled from BTC price gains in recent days may be an early sign worth paying attention to, and is just a piece of noise in a relationship that has historically existed but is not guaranteed to continue.