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

Spot Bitcoin ETFs in the United States have recorded their 19th consecutive day of inflows, prompting traders to question why this hasn't resulted in a surge in Bitcoin's price. Despite the steady inflows, Bitcoin has struggled to surpass the $73,679 mark. Analysts offer explanations for this phenomenon.

As of June 6, Bitcoin ETFs globally hold approximately 1.3 million BTC, representing 5.2% of the circulating supply, with a significant portion held by U.S.-listed ETFs, according to HODL15Capital. However, analysts argue that multiple factors influence Bitcoin's price beyond just ETF inflows.

After the approval of spot Bitcoin ETFs on January 10, Bitcoin's price soared nearly 53%, reaching an all-time high of $73,679 by March 13. Since then, it has failed to rally further, remaining within a range between its peak and the $60,000 support level. Charles Edwards, founder of Capriole Investments, explained that while ETF inflows are substantial, they are not yet powerful enough to outweigh the broader market dynamics.

"ETF flows are fantastic, but they are not strong enough to exceed the entire ecosystem selling (yet)," Edwards stated. He highlighted that for another significant price surge to occur, three major factors need to align: higher average ETF buying, reduced long-term holder selling, or growth in U.S. or global liquidity. Edwards emphasized the role of long-term holders, those who have held Bitcoin for over two years, in influencing the market. This group's share of the total Bitcoin supply has declined slightly to 54% over the past six months, which has had a significant impact on the market. 

Additionally, Edwards noted that the effects of the Bitcoin halving, which reduced daily Bitcoin issuance by 50% in March, have not yet been fully realized. He expects the gap between ETF consumption and newly mined Bitcoin to widen significantly over the next 12 months.

In summary, despite consistent ETF inflows, Bitcoin's price remains influenced by broader market factors, including long-term holder selling and pending impacts from the recent halving event. The market is waiting for a combination of increased ETF buying, decreased long-term holder selling, and growth in liquidity to potentially drive 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.