Despite a record 19-day streak of inflows into US-based Bitcoin spot exchange-traded funds (ETFs), many are questioning why the asset’s price has yet to surpass the all-time high of $73,679 established in March. Some analysts claim to know the explanation.
As of June 6, spot Bitcoin (BTC) ETFs worldwide held approximately 1.3 million Bitcoin or 5.2% of the circulating supply of BTC, of which a good portion was held by US-listed ETFs , according to HODL15Capital.
However, analysts argue that many other factors influence the price and that ETFs do not have enough influence.
“ETF flows are great, but they’re not strong enough to outsell the entire ecosystem (yet)”explains Charles Edwards, founder of Capriole Investments, to Cointelegraph.
“You realize that the market is made up of spots, futures, ETFs and options, right? The price at any time is the product of all of these elements, not just one,” says cryptocurrency trader Christopher Inks in a post today.
“ETFs are important, but the price of BTC is influenced more by macroeconomic factors and geopolitical events”declares the founder of a cryptocurrency exchange, Radar Bear.
Bitcoin ETFs should first expand into more markets
According to data shared by Farside, Bitcoin ETF net inflows were $217.7 million on June 6.
Since launching, spot Bitcoin ETFs have seen inflows of more than $15.5 billion, although some traders believe the amount is still too small to significantly impact prices until more markets open.
“There are still no spot Bitcoin ETFs in the UK or Japan, two important markets. There is a lot of room to grow”comments Timothy Peterson, founder of Cane Island Alternative Advisors.
Following the approval of Bitcoin spot ETFs on January 10, Bitcoin surged nearly 53%, reaching all-time highs of $73,679 on March 13.
However, over the next almost three months, it failed to rally further, trading mostly within the range between the high and the $60,000 support level.
The movements by long-term holders are significant
Edwards highlighted that for a further significant price surge to occur, one of three main factors will need to be present:
“Higher average buying by ETF, reduced selling by long-term holders, growth in US or global liquidity”has explained.
Edwards believes selling by long-term holders is a significant factor, noting that those who have held Bitcoin for more than two years have been selling more frequently in 2024.
Related: Is Bitcoin’s On-Chain Bull Run Over? The indicator flashes red
According to Edwards, this group’s share of Bitcoin’s total supply has declined slightly to 54% over the past six months, with a much larger impact on the asset than meets the eye.
“3% doesn’t seem like a lot, but it’s equivalent to about 630,000 Bitcoins, which is about 3 times the total amount purchased by all Bitcoin ETFs in the US”Edwards clarified.
He also added that the effects of the halving have not yet manifested themselves:
“We have likely not yet seen the impacts of the Bitcoin halving, with daily BTC issuance falling by 50% in March. We will likely see the delta between ETF consumption and mined Bitcoin widen substantially over the next 12 months.”
This article does not contain investment advice or recommendations. Every investment and trading operation involves risk and readers should conduct their own research before making a decision.
Translation by Walter Rizzo
