Despite substantial inflows into US spot Bitcoin Exchange-Traded Funds (ETFs), with more than $1.5 billion added in just the last three days and an unprecedented 18-day streak of positive inflows, BTC’s price remains well below the highly anticipated $100,000 mark. The digital currency trades at around $71,000, a 50% increase since the ETFs’ inception but short of setting a new record high.
Charles Edwards, CEO of Capriole Investments, shared insights via a post on X addressing the community’s burning question: “Why aren’t we at $100,000 yet?” According to Edwards, the answer lies in several key factors beyond just the ETF inflows.
Why The Bitcoin Price Isn’t Rallying Higher
Edwards points out that US spot ETFs have absorbed 200% of the BTC mined since their launch in mid-January, a stark indication of robust demand. Despite such aggressive accumulation, the price surge expected by many market observers hasn’t materialized.
“The inflow into Bitcoin ETFs represents a historically significant demand, yet we’re observing a counterbalance primarily due to long-term holder distribution,” Edwards explained. From an all-time high of 57% in December 2023, the share of BTC’s total supply held by long-term holders (those holding for 2+ years) has diminished to 54%. This shift translates to roughly 630,000 Bitcoins, about 300% of the year’s total BTC purchases by all US ETFs.
“This 3% shift, while seemingly minor, represents a substantial volume of Bitcoin moving from the strongest hands in the market to potentially more speculative or short-term oriented investors,” Edwards noted. Additionally, some of this selling is not pure market exit but rather transitions from older investment vehicles like Grayscale’s BTC Trust to newer ETF products, which may distort the perception of selling pressure.
Edwards also emphasized that the effects of the halving have yet to materialize. “With the daily Bitcoin issuance dropping by 50% in April, we will likely see the delta between ETF consumption and Bitcoin mined widen a lot over the next year. It also takes full quarters for institutions to review, sign-off and allocate (at best). So the major ETF flows are likely still ahead of us,” he stated.
Market timing and macroeconomic conditions further compound the situation. Edwards pointed out that June traditionally marks a lull in financial markets, including Bitcoin and cryptocurrencies, as it aligns with a risk-off sentiment among major asset managers. “Moreover, since the March peak in Bitcoin’s price, USD liquidity has been relatively flat and even slightly negative. This liquidity environment is crucial as it influences investor capacity to inject capital into risk assets like Bitcoin.”
Looking ahead, Edwards remains optimistic but cautious. He outlined three catalysts that could drive Bitcoin’s price to $100,000 and beyond: “Increased daily buying volumes from ETFs, a decrease in selling from long-term holders, and a rejuvenation in US liquidity are essential for robust price appreciation. While these factors may align in the future, the exact timing remains uncertain.”
At press time, BTC traded at $71,659.
Featured image from YouTube @Mark Moss, chart from TradingView.com
