$BTC Until now, I thought that inflows into ETFs and the price of BTC move in the same direction—more institutional money, higher demand, price up. The logic seemed obvious.
But the numbers from the last week showed the opposite. Spot Bitcoin ETFs saw $2.39B in net inflows— the strongest result since last October. And in that same period, the price of BTC fell.
I realized—I had oversimplified. ETF inflows show demand from only one type of participant: institutions through funds. Price, however, is set by the balance of all buyers and sellers together, including liquidations of leveraged positions (in a day, more than $500M in leverage was wiped out). On top of that, the yield on 10-year US bonds is at its highest since 2007—higher rates pressure a non-yielding asset, regardless of what’s being bought in ETFs.
Now, I don’t read the headline “record inflows” as direct confirmation of price growth anymore—it’s only part of the picture.
$BTC #Bitcoin
But the numbers from the last week showed the opposite. Spot Bitcoin ETFs saw $2.39B in net inflows— the strongest result since last October. And in that same period, the price of BTC fell.
I realized—I had oversimplified. ETF inflows show demand from only one type of participant: institutions through funds. Price, however, is set by the balance of all buyers and sellers together, including liquidations of leveraged positions (in a day, more than $500M in leverage was wiped out). On top of that, the yield on 10-year US bonds is at its highest since 2007—higher rates pressure a non-yielding asset, regardless of what’s being bought in ETFs.
Now, I don’t read the headline “record inflows” as direct confirmation of price growth anymore—it’s only part of the picture.
$BTC #Bitcoin
