Over the past eight weeks, Bitcoin (BTC) has absorbed more than $11.2 billion inflows of Exchange-Traded Funds (ETFs). However, its price has only risen by around 10%, much less than many investors expected.
The discrepancy between capital inflows and price performance sparked a wave of concern and speculation, reviving the memory of BlackRock Coinbase’s custody scrutiny.
Bitcoin’s lukewarm response to ETF inflows
In a recent post, Matrixport highlighted the discrepancy between BTC prices and inflows into Spot Bitcoin ETFs over the past eight weeks.
“Bitcoin ETFs continue to buy, why are prices not rising sharply?” the company pointed out.
Despite sustained demand from the facility’s vehicles, Bitcoin’s low response means other forces could offset the inflow. The latest 10x research report reflects that sentiment.
In a new report on Thursday, 10x researchers warned of significant yet almost invisible sales that could be flowing from long-term holders or early investors.
The suppressed response also raises doubts about the behavior of well-known corporate buyers such as MicroStrategy (current strategy).
The current accumulation pace of microstrategy appears to be more restrained than more aggressive purchasing after Donald Trump’s election. This suggests a cautious or highly distributed market environment.
“Look at how the amount of positions dramatically decreases with each purchase (AVG, -52%),” said Jacob King, financial analyst and CEO of whaling, recently.
Meanwhile, the discrepancy between Bitcoin ETF inflow and related BTC price reactions reveals concerns about “Paper BTC.”
In September 2024, BlackRock submitted that its Spot Bitcoin ETF (IBIT) amended amid concerns over Coinbase management practices.
At the time, some investors feared that ETF issuers were resolved with IOUS rather than actual BTC, which undermined price discovery.
Coinbase CEO Brian Armstrong denied the claim and said all ETF-related transactions were settled within one business day.
Similarly, Bloomberg ETF analysts denounced the speculation and rebutted rumors that Coinbase was writing Bitcoin for BlackRock to curb prices.
Analysts say the lack of correlation between BTC ETF inflow and Bitcoin prices is attributed to the lack of correlation with sales pressures for native Bitcoin holders rather than ETF issuers or BlackRock.
Balchunas praised the publisher for actually stabilizing the market.
Nevertheless, speculation has resurfaced amid the current stagnation of Bitcoin prices.
Macro uncertainty clouds emotions
Meanwhile, geopolitical instability could be weighted on price momentum, particularly tensions between Israel and Iran, with the US now taking on position.
According to Santiment, the ongoing conflict between Israel and Iran has resulted in a visible increase in volatility across the code. Bearish sentiment surged between June 12th and 15th, sweeping over $200 billion from the total market capitalization of the code.
Bitcoin fell 4-6% before it stabilized nearly $105,000. Analysts at Santimento say the pattern is reminiscent of previous geopolitical shocks, such as the Russian invasion of Ukraine and the October 2022 conflict between Israel and Palestinians.
“In spite of initial panic, Bitcoin maintained its $104,000-$105,000 range, supported by a consistent ETF influx and a lack of follow-through of military action.st.
Despite the sustained ETF inflow and stable on-chain foundations, traders are hesitant. The volatility is compressed and the fluidity appears thin underneath the surface.
According to a 10x survey, traders are betting on breakouts or braces.
Essentially, Bitcoin’s price action could reflect deeper structural tensions. There is a conflict between bullish flows from the institutions, careful re-entry from bystanders and strategic sales from longtime holders.
Bitcoin could ignore the influx story until that imbalance is resolved and price formation returns.
According to Beincrypto data, BTC has traded at $105,054 at the time of this writing, down 0.36% over the past 24 hours.
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