FameEX Hot Topics | Why Isn't BTC Price Increasing Despite Billions in ETF Inflows?

Spot Bitcoin ETFs in the United States continue to experience inflows for the 19th consecutive day, sparking inquiries from traders regarding the absence of a significant surge in Bitcoin's price. Despite this consistent flow, Bitcoin has struggled to surpass the $73,679 mark. Analysts suggest various reasons for this trend.

As of June 6, global Bitcoin ETFs hold approximately 1.3 million BTC, representing 5.2% of the circulating supply, with a notable share held by U.S.-listed ETFs, as per HODL15Capital. However, analysts argue that Bitcoin's price is influenced by multiple factors beyond ETF inflows.

Following the approval of spot Bitcoin ETFs on January 10, Bitcoin witnessed a remarkable 53% surge, peaking at an all-time high of $73,679 by March 13. Since then, the price has remained stagnant, fluctuating within the range of its peak and the $60,000 support level. Charles Edwards, the founder of Capriole Investments, explains that while ETF inflows are significant, they are not sufficient to counterbalance broader market dynamics.

"ETF flows are substantial, but they are not potent enough to offset the collective selling pressure within the ecosystem," stated Edwards. He highlighted that for a significant price surge to materialize, three major factors need alignment: increased average ETF buying, reduced selling pressure from long-term holders, or an expansion in U.S. or global liquidity. Edwards underscores the impact of long-term holders, whose share of the total Bitcoin supply has marginally decreased to 54% over the past six months, significantly impacting the market.

Furthermore, Edwards points out that the effects of the Bitcoin halving event, which halved daily Bitcoin issuance in March, are yet to fully materialize. He anticipates a substantial widening of the gap between ETF consumption and newly mined Bitcoin over the next year.

In conclusion, despite steady ETF inflows, Bitcoin's price trajectory is influenced by broader market dynamics, including selling pressure from long-term holders and anticipated impacts from the recent halving event. A convergence of factors such as increased ETF buying, reduced long-term holder selling, and liquidity expansion may potentially catalyze another significant price surge. Until then, Bitcoin's price is likely to remain within its current range.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.