Bitcoin Faces a ‘Liquidity Crisis’ in 6 Months According to Latest ETF Analysis


According to one analyst, this year will mark the tipping point in the dynamics of supply of Bitcoin, as Bitcoin ETFs are consuming all available BTC for purchase.

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According to an industry analyst, if institutional inflows continue, Bitcoin will experience a “sell-side liquidity crisis” by September.

The CEO and founder of the on-chain analytics platform CryptoQuant, Ki Young Ju, forecasted a BTC supply watershed “within six months” in a thread on X on March 12.

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Ki Asserts: Bitcoin Bears “Unable to Prevail” Amid Ongoing ETF Inflows

According to industry participants, the use of Bitcoin as an institutional investment allocation is still in its infancy, given the increasing popularity of US-based spot Bitcoin exchange-traded funds (ETFs).

With almost $30 billion as of right now, they are the most successful ETF launch ever.

But if the pattern carries on, there may be insufficient Bitcoin to meet demand, which would be a novel phenomenon.

Ki summed up, saying, “Bears can’t win this game until spot Bitcoin ETF inflow stops.”


With 3 million BTC in miner wallets and exchanges, he pointed out that ETFs alone invested more than 30,000 BTC last week, making the likelihood of a supply-driven price shock evident.

“Spot ETFs saw netflows of +30,000 BTC last week. He went on, “Known entities like miners and exchanges hold about 3 million bitcoins, with 1.5 million of those held by US entities.


“At this rate, we’ll see a sell-side liquidity crisis within 6 months.”

Bitcoin holdings summary (screenshot). Source: Apollo

The Grayscale Bitcoin Trust (GBTC), whose daily withdrawals regularly exceed $500 million, is defying the trend.

Remarkably, the dollar value of GBTC’s reduced BTC holdings has hardly decreased, as noted by well-known commentator WhalePanda, considering the gains in BTC prices since the ETF launch in January.

“With $494 million in withdrawals, GBTC is acting like a bitch once more. Regards, Barry. In part of an X post, he mentioned Barry Silbert, the former CEO of Grayscale’s parent company, Digital Currency Group, saying, “They’re now setting below 400k Bitcoin.”

“The problem is that with the price going up and their massive outflows, their holdings in $ are still same as where we started at.”

Sell-side liquidity and thin orderbook?

According to Ki, the impact on the price of bitcoin could surpass market expectations when the demand for ETFs reaches a tipping point.

“Due to limited sell-side liquidity and a thin orderbook, once a sell-side liquidity crisis is realized, its next cyclical top may exceed our expectations,” he said in closing.

Before the “crisis” materializes, the amount of Bitcoin held by so-called “accumulation addresses”—wallets that only receive inbound transactions—must still double, according to Ki.CRYPTOCASTER® - DECENTRALIZED FREEDOM!


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