Despite substantial inflows into spot Bitcoin exchange-traded funds (ETFs) in the United States, with over $1.5 billion added in the last three days alone and an unprecedented 18-day streak of positive inflows , the BTC price remains well below the highly anticipated $100,000 mark. The digital currency is trading at around $71,000, an increase of 50% since the ETFs’ inception, but not hitting a new record high.
Charles Edwards, CEO of Capriole Investments, shared his insights via a job on X answering 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 ETF Entries.
Why the price of Bitcoin is not rising higher
Edwards points out that US spot ETFs have absorbed 200% of the BTC mined since their launch in mid-January, a clear indication of robust demand. Despite such aggressive accumulation, the price surge expected by many market observers did not materialize.
“The inflow into Bitcoin ETFs represents historically significant demand, but we are seeing a counterbalance primarily due to long-term holder distribution,” Edwards explained. From an all-time high of 57% in December 2023, the share of the total BTC supply held by long-term holders (those holding more than 2 years) decreased to 54%. This change translates to approximately 630,000 Bitcoins, or approximately 300% of the total annual BTC purchases by all US ETFs.
“This 3% change, 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. Furthermore, part of these sales does not constitute a simple exit from the market but rather a transition from older investment vehicles such as Grayscale’s BTC Trust to newer ETF products, which can distort the perception of selling pressure.
Edwards also pointed out that the effects of the halving have not yet materialized. “With Bitcoin issuance dropping 50% daily in April, we will likely see a delta between ETF consumption and ETF consumption. Bitcoin mined expand significantly over the next year. It also takes full quarters for institutions to review, approve and allocate (at best). So the major ETF flows are probably still ahead of us,” he said.
Market synchronization and macroeconomic conditions further aggravate the situation. Edwards pointed out that June traditionally marks a lull in financial markets, including Bitcoin and cryptocurrencies, as this corresponds with a sense of risk aversion among major asset managers. “Furthermore, since the Bitcoin price peak in March, USD liquidity has remained relatively stable or even slightly negative. This liquidity environment is crucial because it influences the ability of investors to inject capital into risky assets like Bitcoin.
Looking ahead, Edwards remains optimistic but cautious. He outlined three catalysts that could drive the price of Bitcoin to $100,000 and beyond: “Increasing daily ETF buying volumes, decreasing long-term holder selling, and rejuvenating liquidity American are essential to strong price appreciation. Although these factors may align in the future, the exact timeline remains uncertain.
At press time, BTC was trading at $71,659.
Featured image from YouTube @Mark Moss, chart from TradingView.com
