Despite a remarkable 19-day streak of inflows into U.S.-based spot Bitcoin exchange-traded funds (ETFs), observers are puzzled by the failure of Bitcoin’s price to surpass its record high of $73,679 set in March. Analysts claim to have the explanation.
As of June 6, spot Bitcoin (BTC) ETFs worldwide held approximately 1.3 million Bitcoin, which accounts for 5.2% of the circulating supply of BTC, with a significant portion being held by U.S.-listed ETFs, as reported by HODL15Capital.
Yet, analysts suggest that the price is influenced by various other factors and that the ETFs do not wield sufficient influence. “ETF flows are impressive, but they are not yet strong enough to overcome the entire ecosystem selling,” remarked Charles Edwards, the founder of Capriole Investments, in an interview with Cointelegraph.
“You need to understand that the market comprises spot, futures, ETFs, and options. The price at any given time is a culmination of all these elements, not just one,” noted crypto trader Christopher Inks in a post on June 7.
Radar Bear, co-founder of a cryptocurrency exchange, explained to Cointelegraph that while ETFs are important, the price of BTC is predominantly shaped by macroeconomic factors and geopolitical events.
According to data from Farside, net inflows into Bitcoin ETFs on June 6 amounted to $217.7 million. Since their inception, spot Bitcoin ETFs have attracted over $15.5 billion in inflows, although some traders argue that this figure is still insufficient to significantly impact prices until more markets open up.
“There are currently no spot Bitcoin ETFs in major markets like the U.K. or Japan. There is ample room for expansion,” stated Timothy Peterson, founder of Cane Island Alternative Advisors, in an interview with Cointelegraph.
Following the approval of spot Bitcoin ETFs on Jan. 10, Bitcoin soared by nearly 53%, reaching all-time highs of $73,679 by March 13. However, in the subsequent three months, it has struggled to make further gains, trading mostly within the range of its peak and the $60,000 support level.
Charles Edwards highlighted that for a significant price surge to occur, confirmation of one of three major factors is essential: “Increased average ETF purchases, reduced selling by long-term holders, and growth in U.S. or global liquidity.”
He emphasized the impact of long-term holder selling, pointing out that holders of Bitcoin for over two years have been selling more frequently. This group’s share of the total Bitcoin supply has decreased slightly to 54% over the past six months, which has a substantial impact on Bitcoin’s price.
Furthermore, Edwards mentioned that the effects of Bitcoin halving have not yet been realized. This article is not intended as investment advice, and readers are encouraged to conduct their own research before making any financial decisions.