By Michael Scott
The Bitcoin ETFs have, in recent weeks, gobbled up huge BTC units, prompting analysts to anticipate potential sell-side liquidity crisis in the future. On Tuesday, the analyst firm CryptoQuant chief Ki Young Ju reflected on the US Bitcoin spot ETFs witnessing accelerated demand with daily net inflows surpassing $1 billion.
BlackRock’s IBIT Realizes Record Haul
The executive observes that the Grayscale Bitcoin Trust (GBTC) still suffers consistent outflows, though slowing to $79 million from the $494 million recorded a day earlier. The scrutiny of the overall segment shows that BlackRock’s iShares Bitcoin Trust (IBIT) realized a record haul of $849 million. Interestingly, smaller issuers such as VanEck only managed $82 million.
The demand attained by ETFs appears relentless since the funds’ listing on January 11 to garner $11.1 billion in net inflows in barely sixty days. The analysts attribute the ETFs driving Bitcoin to the all-time high above $73,000 weeks before the periodic halving they predict will predate record figures.
Bitcoin Supply Unable to Meet ETFs Demand
Analysts indicated that the ETF fund’s collectively hold over 800,000 bitcoins, accounting for nearly 4% of the existing supply. Analysts warn that the Bitcoin market would suffer a liquidity crisis if the spot ETF funds sustain the pace of soaking up coins.
Analysts warn that the available supply of Bitcoin cannot satisfy the overwhelming demand for the largest crypto by market capitalization. CryptoQuant chief executive Young Ju reflected on the situation where on-chain entities, among them exchanges, whales, and miners, are holding 3 million Bitcoin.
Ju indicated in a Wednesday Twitter publication that the ETFs’ rate of Bitcoin uptake would cause a sell-side liquidity crisis within six months. The liquidity crunch would trigger Bitcoin’s cyclical top to surpass expectations, with buy orders flooding into order books.
Bitcoin Exchanges Suffer Huge Outflows
Although the demand for ETF buying is raging, CryptoQuant’s Exchange Netflow illustrates that Bitcoin exchanges have suffered more substantial outflows than inflows in 30 days.
Ju explains that high flow value illustrates the rising selling pressure in the spot exchanges. The executive explains that high flow value within the derivative exchange shows high volatility.
The miners show that the Bitcoin miners’ data portrays a mixed bag. One aspect has miners ramping up to the overpaid extremes as the Bitcoin price rallies. The miners seem to be moving coins on-chain, indicating selling a portion of the stash.
The Major miners led by Riot Platforms Inc (RIOT) and Marathon Digital (MARA) have their Bitcoin amount rising steadily. Ju attributes that to the anticipation of halving and adds that the bull market will continue until ETF inflow slows.