In a development, in the world of cryptocurrency Bitcoin is approaching a moment that could change how it is traded by September. The main reason behind this shift is the increasing interest from investors in Bitcoin especially through exchange traded funds (ETFs). This rise in attention might lead to a situation where theres not Bitcoin for sale if the current trend of institutional investments continues.
Ki Young Ju, the CEO of CryptoQuant, a platform for on chain analytics has expressed concerns about a BTC supply turning point.” Ju believes that the continuous flow of funds into Bitcoin ETFs in the US shows how appealing Bitcoin has become as an investment for mainstream institutions. With $30 billion currently invested in these ETFs their success has been unprecedented compared to ETF launches.
However this promising trend also comes with its challenges. The core issue revolves around whether there will be Bitcoin to meet the increasing demand. As Ju points out succinctly “The bears won’t be able to gain ground unless the inflow into spot Bitcoin ETFs slows down.” This statement is reinforced by the purchase of over 30,000 BTC by ETFs, within the last week.
With about 3 million BTC held by entities, like exchanges and miners including 1.5 million owned by U.S. Parties, the concern of a price shock due to supply looms
Adding complexity to the situation is the status of the Grayscale Bitcoin Trust (GBTC) which has experienced outflows totaling $494 million. Despite these outflows the increasing value of Bitcoin has kept GBTCs holdings dollar worth. This scenario has sparked criticisms from figures in the community such as WhalePanda, who highlighted GBTCs diminishing holdings amid rising BTC prices.
The looming risk of a “sell side liquidity crisis” is not just theoretical. A possibility with significant implications for the Bitcoin market.
If this crisis occurs it could lead to an impact on Bitcoins price due to sell side liquidity and a thin order book coming together. Jus analysis also indicates an increase, in Bitcoin held by “accumulation addresses ” suggesting that there is a base of long term holders. This trend must. Potentially double before the expected liquidity crisis materializes.
The cryptocurrency community is closely observing these changes as they unfold. The upcoming months could mark a turning point, for Bitcoin. The interaction between the growing acceptance via ETFs and the limited availability of Bitcoin might pave the way for an era, in the digital assets trajectory.
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