bitcoin remains the market leader. However, despite major developments such as the introduction of spot bitcoin exchange-traded funds (ETFs), the projected price rise to $100,000 remains “unrealized.”
Charles Edwards, founder of Capriole Investments, commented on this and took to Elon Musk's x social media platform to x.com/caprioleio/status/1798983708537733507″ target=”_blank” rel=”nofollow”>explain the obstacles preventing bitcoin from reaching this milestone.
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Examining bitcoin's Stagnation Below $100,000
According to Edwards, one of the main factors is the selling of bitcoin by long-term holders. His analysis shows a decline in wallets containing bitcoin for more than two years, from an all-time high of 57% in December 2023 to 54%.
Although this 3% drop may seem minor, it represents around 630,000 btc, well above the amount purchased by US bitcoin ETFs since January. This sell-off by long-time investors is putting downward pressure on the price.
Edwards also noted that the market has yet to fully feel the impact of the bitcoin halving event in April, which reduced daily bitcoin issuance by 50%.
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We have not yet seen the impacts of Halving.
Given that daily bitcoin issuance fell by 50% in April, we are likely to see the delta between ETF consumption and bitcoin mined widen greatly over the next year. It also takes full quarters for institutions to review, approve and… pic.twitter.com/bAxfFzv6L8
—Charles Edwards (@caprioleio) twitter.com/caprioleio/status/1798983716825657659?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>June 7, 2024
He believes the gap between the amount of bitcoin purchased by spot ETFs and reduced mining output will widen significantly, underscoring the need for financial institutions to adjust their strategies and continue to lead the way in bitcoin acquisitions.
Meanwhile, Edwards identified three key factors that he believes are essential for a strong rise in the price of bitcoin: increased daily ETF purchases, reduced selling by long-term holders, and an expansion in liquidity of the US market.
btc Price Slows Amid Record ETF Inflows
bitcoin is trading at $71,926, showing modest moves as it struggles to mark any price gains in the last 24 hours, despite a 4.9% rise in the last 7 days.
While Charles Edwards has detailed the reasons why bitcoin failed to reach the $100,000 milestone, other experts are analyzing why substantial inflows into btc spot ETFs have not translated into a corresponding price increase.
Experts believe that several factors dampen the influence of ETFs on the price of bitcoin. Experienced cryptocurrency trader Christopher Inks notes that a complex interplay of spot, futures, options, and ETF trading influences the bitcoin market.
Inks highlights that focusing exclusively on ETF activities does not provide a complete view of market dynamics. In response to a user's question on The price at any time is a product of all of these, not just one of them.”
Further discussions among financial experts illuminate the multifaceted nature of the btc market. Analyst Eric Balchunas suggests that the lack of price movement despite ETF purchases could be due to current bitcoin holders selling their holdings, which balances out the ETF buying pressure.
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I've said it before and I'll say it again, the call comes from inside the Holmes house. This is not what ETFs do, obviously because they are buying like crazy lately, it's bitcoin holders who sell or leveraged issuers or whatever. Time and time again, ETFs go on flow marathons and encounter… https://t.co/iuGNayrLgd
– Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1798804620422095044?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>June 6, 2024
Another expert, Jimie, x.com/Your_NLP_Coach/status/1798840734940049579″ target=”_blank” rel=”nofollow”>Explain that while ETFs contribute to market activity, they represent a small portion of the total bitcoin circulation.
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Jimie added that most are controlled by large holders (“whales”), whose trading activities could dominate the influence of ETF purchasing. This dynamic indicates that large purchases by ETFs are often combined with strong selling, maintaining price balance.
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