Why Bitcoin Price Haven't Surpassed $73,679 Despite Record ETF Inflows?
Summary:
US Bitcoin ETFs have seen a record 19-day influx, yet the price of Bitcoin hasn't exceeded $73,679. Experts highlight the impact of other market elements like futures, spots and options in addition to ETFs. ETFs' influence might rise with their availability in more markets. One key point affecting prices is the selling by long-term Bitcoin holders, which had more impact than ETF buying. Also, the effect of Bitcoin's issuance reduced by 50% in March hasn't surfaced yet.
Even though United States Bitcoin (BTC) exchange-traded funds (ETFs) have experienced a continuous 19-day influx, Bitcoin's price hasn't managed to soar beyond $73,679. Experts provide insights into this phenomenon. As per data released on June 6, global Bitcoin ETFs hold about 1.3 million Bitcoin, representing 5.2% overall circulating supply, and the US accounts for a substantial part, per HODL15Capital. But, market analysts suggest that many dynamics play roles in price determination and that ETFs don't exert sufficient influence.
Charles Edwards, Founder of Capriole Investments, on June 6 noted, "ETF flows are running well but are yet strong enough to exceed all selling in the ecosystem." Noting the complexity of the market, Christopher Inks, a cryptocurrency trader, said on June 7, "The market is a conglomeration of spots, futures, ETFs, and options... It's not solely about any of these."
Radar Bear, co-founder of a cryptocurrency exchange, emphasized the greater impact of geopolitical and macroeconomic incidents. Bitcoin ETFs will likely require broader market availability, as per Farside data stating $217.7 million in the net inflows of Bitcoin ETFs on June 6. Since initiation, more than $15.5 billion inflows have been recorded, but this volume is still seemingly inadequate to see a substantial impact on prices until more markets get involved.
Timothy Peterson, Founder of Cane Island Alternative Advisors, adds "The UK and Japan, both major markets, are yet to have Spot Bitcoin ETFs, hence, there is enormous growth potential." On January 10, following the approval of spot Bitcoin ETFs, Bitcoin skyrocketed almost 53%, achieving a record $73,679 by March 13. However, for almost three months since then, it has seen no further rallying, primarily fluctuating between its peak and the support level of $60,000.
Per Edwards, one or more of these three trends require confirmation for another significant price jump: Increased average ETF buying, reduced long-term holder selling, and liquidity growth in the US or globally. Edwards stressed the relevance of long-term holder movement. He pointed out that holders owning Bitcoin for over two years are selling more this year. He concluded, "Although it doesn't seem much, this 3% drop in long-term holder share of total supply, equivalent to approximately 630K Bitcoin, is about 3X the total amount purchased by all US Bitcoin ETFs."
He also noted that effects of the Bitcoin halving, where daily Bitcoin issuance decreased by 50% in March, haven't yet kicked in. According to him, the difference between ETF consumption and Bitcoin mined will likely broaden significantly over the next 12 months. This article is for informational purposes only; it does not include investment advice or suggestions. Every investment or trading decision carries a level of risk, and readers are urged to research independently when deciding.
Published At
6/7/2024 8:56:19 AM
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