Despite a remarkable 19-day streak of inflows into United States-based spot Bitcoin exchange-traded funds (ETFs), many are questioning why the price of Bitcoin has not managed to surpass its all-time high of $73,679 set in March. Analysts claim to have the answer.
As of June 6, spot Bitcoin (BTC) ETFs globally held approximately 1.3 million Bitcoin, which accounts for 5.2% of BTC’s circulating supply, with a significant portion of that being held by U.S. listed ETFs, as reported by HODL15Capital.
Nevertheless, analysts argue that there are several other factors at play influencing the price, and that the ETFs alone do not wield enough influence.
“ETF flows are impressive, but they are not powerful enough to surpass the impact of the entire ecosystem selling (yet),” remarked Charles Edwards, the founder of Capriole Investments, in a statement to Cointelegraph.
“You must understand that the market consists of spot, futures, ETFs, and options. The price at any given moment is a result of all of these factors, not just one,” pointed out crypto trader Christopher Inks in a post on June 7.
“ETFs play a crucial role, but the price of BTC is more significantly influenced by macroeconomic factors and geopolitical events,” explained cryptocurrency exchange co-founder Radar Bear to Cointelegraph.
Bitcoin ETFs may need to expand into more markets initially. 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 seen over $15.5 billion in inflows, although some traders believe that the impact on prices will not be significant until other markets open up.
“There are still no spot Bitcoin ETFs in the U.K. or Japan, two major markets. There is plenty of room for expansion,” noted Timothy Peterson, the founder of Cane Island Alternative Advisors, in an interview with Cointelegraph.
Bitcoin’s price has risen by 12.57% in the last 30 days. Following the approval of spot Bitcoin ETFs on Jan. 10, Bitcoin surged by nearly 53%, reaching all-time highs of $73,679 by March 13.
However, in the subsequent three months, it has failed to make further significant gains, trading primarily within the range of its high and the $60,000 support level.
The movement of long-term holders is a crucial factor. Edwards highlighted that for another notable price surge to occur, confirmation of one of the three major factors will be necessary: “Higher average ETF buying, reduced selling by long-term holders, growth in U.S. or global liquidity,” he specified.
Edwards stressed the impact of the selling by long-term holders, noting that those who have held Bitcoin for more than two years have been selling more frequently in 2024.
This group’s share of the total Bitcoin supply has slightly decreased to 54% over the past six months, according to Edwards, which has a more substantial impact on Bitcoin than it may seem.
“While 3% may not seem significant, it is equivalent to approximately 630,000 Bitcoin, or about three times the total amount purchased by all Bitcoin ETFs in the United States,” he elaborated.
He also mentioned that the effects of the Bitcoin halving have not yet materialized.
This article does not offer investment advice or recommendations. All investment and trading decisions involve risk, and readers should conduct their own research before making any decisions.