About 80% of Bitcoin ETF purchases since their launch in January have been made by “self-directed investors” through online brokerage accounts, said Samara Cohen, chief investment officer for BlackRock, the world’s largest asset manager.Wall Street veteran Jim Bianco, president of financial research firm Bianco Research notes that retail investors, often referred to as “paper hands,” are more likely to sell their holdings during market downturns compared to traditional finance (TradFi) institutions.
Bianco pointed out that the average size of a Spot BTC ETF trade is just $14.6k, significantly smaller than other popular ETFs among TradFi investors, and roughly one-tenth the size of a SPY trade. 
Average size of a trade (Bianco Research)Bianco emphasizes the importance of building an alternative financial system rather than being absorbed by TradFi. He argues that the existence of ETFs is moving money off-chain, hindering Bitcoin’s long-term goal of becoming part of a new financial system.A recent JP Morgan report reveals that $16 billion has flowed into Bitcoin ETFs year-to-date, while $13 billion has left digital wallets, suggesting only $3 billion of net new money. The decline in Bitcoin reserves across exchanges, which is estimated by CryptoQuant at $13 billion since the ETF launch, implies that most of the $16 billion inflow into spot Bitcoin ETFs reflects a rotation from existing digital wallets.
