Bitcoin Has 6 Months to ETF ‘Liquidity Crisis’ – New Analysis
If institutional inflows continue, Bitcoin (BTC) will face a “sell-side cash crisis” in September, according to one industry analyst.
Ki Yang Ju, founder and CEO of on-chain analytics platform CryptoQuant, predicted a BTC supply pool “within six months” on X on March 12.
Q: Bitcoin Bears “Can't Win” As ETF Flows Continue
Bitcoin is still nascent as an institutional investment allocation, industry participants say, with the rise of Bitcoin exchange-traded funds (ETFs) in the United States-based space.
They are now the most successful ETF startup in history, with nearly $30 billion in assets.
If the trend continues, however, a new phenomenon may occur where there is not enough BTC available to meet demand.
“The bears will not be able to win this game until the spot Bitcoin ETF flows stop,” Key summarized.
Last week, EFF alone deposited more than 30,000 BTC and 3 million BTC through exchanges and mining wallets, saying the possibility of a supply-induced price shock is becoming clear.
“Last week, spot ETFs saw net flows of +30K BTC. Known entities such as exchanges and miners hold 3M BTC, including 1.5M BTC in US entities,” he continued.
“At this rate, we'll see a sell-side financial crisis within 6 months.”
Continuing the trend is the Greyscale Bitcoin Trust (GBTC), whose daily outflow has reached $500 million.
Noted analyst WhalePanda notes that considering BTC's price gains since the ETF's launch in January, the dollar value of GBTC's reduced BTC holdings has actually declined.
“GBTC is a bit of a bitch again with a cost of $494 million. Thanks Barry. They're starting to settle below 400k bitcoins,” Barry Silbert, former CEO of Greyscale's parent company, Digital Currency Group, wrote in part in X's post.
The problem is that the cost is increasing and their holdings in $ are still the same as when we started.
1.4 million BTC to go?
Coming from the point of gaining interest from ETFs, Ki predicts that the BTC price impact may be greater than market expectations.
Related: BTC Price Increases by $70K — 5 Things to Know in Bitcoin This Week
“Once a sell-side liquidity problem occurs, the next cyclical peak may be higher than we expect due to limited sell-side liquidity and a thin order book,” he concluded.
Ki has shown a continuous and extensive growth in BTC with so-called “storage addresses” – wallets with incoming transactions – which still needs to double before the “crisis” begins.
As Cointelegraph reports, storage address holdings have recently begun to cool as Bitcoin reaches new highs.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
