Bitcoin spot ETF has seen net inflows for 10 consecutive days! But BTC is still fluctuating at $66,000

This site (120btC.coM): According to SoSoValue data, the Bitcoin spot ETF has experienced net inflows for 10 consecutive days as of July 18, with a total inflow of nearly US$2 billion since July 5. (Currently, it seems that there is a high probability that 7/19 will also be a net inflow)

However, at the same time, although the price of Bitcoin has fluctuated and risen since July 5, it appears to be somewhat weak. Very smooth pulling feeling. This week, after fluctuating for a long time at 65,000 US dollars, it successfully reached 66,000 US dollars. What are the possible factors affecting the lack of Bitcoin buying?

Some Bitcoin spot ETF buyers are engaging in arbitrage

We know that not all Bitcoin spot ETF buyers are long-term investors or people with firm beliefs in Bitcoin. Many of these buyers may be institutional investors engaged in arbitrage operations, which may make the inflows into the Bitcoin spot ETF look larger than they actually are.

Cryptocurrency analyst Marcel Pechman pointed out that the main holders of IBIT and FBTC are hedge funds known for arbitrage trading, including Millennium Management, Schonfeld Strategy Advisors and Jane Street. These hedge funds are good at arbitrage trading and are selling While buying Bitcoin futures, buy the same spot ETF position.

Although there is no direct evidence that these hedge funds are executing arbitrage trades, Marcel Pechman said that these funds are not typical long-term holders, nor are they firm believers in Bitcoin’s value proposition. Additionally, open interest in CME Bitcoin futures currently stands at $10.2 billion, up 23% from the previous week, indicating that many hedge funds are seeking gains from BTC futures contract premiums, which are currently at an annualized rate is 11%.

Thus, the increase in CMEBTC futures open interest partially explains the limited impact of net Bitcoin spot ETF inflows.

Improving inflation will not help Bitcoin prices

Marcel Pechman went on to point out that Bitcoin’s appeal is particularly valued during times of economic instability, such as the collapse of the purchasing power of fiat currency or the lack of trust in the government’s ability to repay debt. But now, the inflation situation in the United States has improved and the performance of national debt has become better, which means that everyone has considerable confidence in the economic policy of the United States.

As the market continues to hit new highs for the U.S. stock market, Bitcoin is looking less attractive as an alternative store of value. Marcel Pechman believes that good economic data will have a negative impact on the price of Bitcoin, so even with the inflow of spot ETFs, the price of Bitcoin has not risen significantly.

The German government sold 50,000 BTC

In addition, starting from June 19, German government-related wallets have successively transferred nearly 50,000 Bitcoins to exchanges and market makers such as Coinbase, Kraken, and Bitstamp for sale until July. It was completely cleared on the 13th, which is also believed to have caused investor panic and was one of the main reasons why Bitcoin continued to fall in early July.

Potential selling pressure on Mt.Gox

Looking back on the 16th, the price of Bitcoin fell sharply from US$65,000 to US$62,369. The flash crash was mainly caused by the transfer of 95,000 Bitcoins from the bankrupt Mt.Gox exchange. The impact of the news on the unknown wallet highlights the market’s concerns about the possible selling pressure caused by Mt. Gox’s repayment.

Financial analyst Jacob King once analyzed that up to 99% of creditors may choose to sell the Bitcoins they receive because the value of Bitcoin has soared 8,500% in the 10 years since Mt. Gox went bankrupt. This factor The repayment of Mt. Gox has always caused market concerns; however, some analysts hold a different view and believe that the selling pressure will not be more serious than the market thinks.

In addition, due to the different cryptocurrency exchanges where creditors receive repayment, the actual time they receive repayment will also be different. The entire repayment cycle is expected to last until October, which means that the selling pressure may continue until October. . This may be one reason why Bitcoin has not been able to sustain its recent climb.

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