Friday Newsletter

Explore the latest trends, gain valuable insights, and stay informed in the dynamic cryptocurrency ecosystem.

07 June 2024

Spot Bitcoin ETFs in the United States have recently marked their 19th consecutive day of inflows, yet the price of Bitcoin remains stagnant. Traders and analysts shed light on why the price hasn’t surged despite this significant influx.

As of June 6, spot Bitcoin ETFs globally hold approximately 1.3 million BTC, equating to 5.2% of the circulating supply, with a substantial portion held by U.S. listed ETFs, according to HODL15Capital. Despite this, analysts suggest that other factors are preventing a price surge.

“ETF flows are significant, but they alone cannot overpower the entire market dynamics,” Capriole Investments founder Charles Edwards told Cointelegraph.

“The market consists of spot trading, futures, ETFs, and options. The price at any given time is influenced by all these elements,” crypto trader Christopher Inks noted in a June 7 X post.

“Macroeconomic factors and geopolitical events play a larger role in influencing BTC prices,” explained Radar Bear, co-founder of a cryptocurrency exchange, to Cointelegraph.

Expansion of Bitcoin ETFs in Other Markets

On June 6, Bitcoin ETF net inflows reached $217.7 million, according to Farside. Since their inception, spot Bitcoin ETFs have accumulated over $15.5 billion in inflows. However, traders believe that this is not enough to significantly impact prices until more markets adopt these ETFs.

“There are still no spot Bitcoin ETFs in the U.K. or Japan, two major markets with significant potential for growth,” said Timothy Peterson, founder of Cane Island Alternative Advisors, to Cointelegraph.

Following the approval of spot Bitcoin ETFs on Jan. 10, Bitcoin saw a 53% surge, hitting an all-time high of $73,679 by March 13. However, in the three months since, it has struggled to rise further, mostly trading between its peak and the $60,000 support level.

The Impact of Long-term Holder Movement

Edwards highlighted that for another significant price surge to occur, one of three major factors needs to be confirmed: increased average ETF buying, reduced selling by long-term holders, or growth in U.S. or global liquidity.

“Long-term holders, who have held Bitcoin for over two years, have been selling more frequently in 2024, which is a significant factor,” Edwards explained.

This group’s share of the total Bitcoin supply has decreased slightly to 54% over the past six months, which significantly impacts Bitcoin’s price. “A 3% drop may not sound like much, but it equates to about 630,000 Bitcoin, or roughly three times the amount purchased by all U.S. Bitcoin ETFs,” he noted.

Edwards also pointed out that the effects of the Bitcoin halving are yet to be felt. “The daily Bitcoin issuance dropped by 50% in March, and we are likely to see a significant gap between ETF consumption and newly mined Bitcoin over the next 12 months.”