News

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

single-image

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.

Stay in the know on crypto by frequently visiting Crypto News Today

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.

CryptoCaster Quick Check:

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.”

Advertisement

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.

Advertisement

“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!


W

e hope you enjoyed this article. Before you move on, we invite you to consider supporting CryptoCaster’s journalism.

Billionaire owners like Elon Musk, Larry Fink (BlackRock), and Jamie Dimon (JP Morgan Chase) often have a strong influence on the hidden agendas surrounding the paradigm shift brought about by cryptocurrency and emerging Web3 technologies. CryptoCaster stands apart. We have no billionaire owner or shareholders to please. Our journalism is dedicated to serving the public interest in crypto development and institutional disruptions, not profit motives.

We avoid the pitfall of much U.S. and global media, which often resorts to false equivalence in the name of neutrality and retail consumer protection. While fairness and transparency guide everything we do, we recognize that there is a right and wrong stance in the fight against fiat global banking interests and the monetary reconstruction driven by the emerging crypto ecology.

When we report on issues like the FTX, Binance, and Ripple crises, we’re not afraid to name names and uncover the truth. As a crypto sentinel, we offer a fresh, outsider perspective on global monetary disruption—something often missing from the insular American and European media bubble.

CryptoCaster’s paywall-free journalism is accessible worldwide thanks to our unique reader-supported model. This is made possible by readers like you. Your support keeps us independent, free from outside influence, and accessible to everyone, regardless of their ability to pay for news and information.

We are grateful for the ongoing monetary support from our readers. If you haven’t yet considered supporting CryptoCaster, please consider contributing just once from $1 or more in Bitcoin (satoshi) or Ether, or even better, support us monthly with a bit more. Scroll further down this page to find CryptoCaster’s wallet addresses.

Thank you.

Kristin Steinbeck
Editor, CryptoCaster


Please Read Essential Disclaimer Information Here.
© 2024 Crypto Caster provides information. CryptoCaster.world does not provide investment advice. Do your research before taking a market position on the purchase of cryptocurrency and other asset classes. Past performance of any asset is not indicative of future results. All rights reserved.


Contribute to CryptoCaster℠ Via Metamask or favorite wallet. Send Coin/Token to Addresses Provided Below.
Thank you!
BTC – bc1qgdnd752esyl4jv6nhz3ypuzwa6wav9wuzaeg9g
ETH – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
MATIC – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
LITECOIN – ltc1qxsgp5fykl0007hnwgl93zr9vngwd2jxwlddvqt


CRYPTOCASTER HEATMAP


You may also like