Why Bitcoin’s Price Remains Stable Despite Significant ETF Inflows

The price of Bitcoin has remained relatively stagnant despite significant inflows into spot Bitcoin ETFs in the United States, which have seen a 19-day streak of inflows. Analysts and traders point to several reasons why this influx of investment hasn't led to a price surge.

As of June 6, spot Bitcoin ETFs globally hold around 1.3 million Bitcoin, equivalent to 5.2% of the circulating supply. A considerable portion of this is held by U.S. listed ETFs. However, according to Capriole Investments founder Charles Edwards, these inflows are not yet strong enough to counterbalance the broader market forces.

Crypto trader Christopher Inks highlights that Bitcoin's price is influenced by a combination of spot, futures, ETFs, and options markets, not just ETF flows. Additionally, Radar Bear, co-founder of a cryptocurrency exchange, emphasizes the role of macroeconomic factors and geopolitical events in shaping Bitcoin's price.

Despite the inflows, the absence of spot Bitcoin ETFs in major markets like the U.K. and Japan limits the potential impact. Timothy Peterson, founder of Cane Island Alternative Advisors, points out that there is significant room for growth in these markets.

Bitcoin's price has risen by 12.57% over the past 30 days, but it hasn't surpassed its all-time high of $73,679 set in March. The price remains within a range between this high and the $60,000 support level. For another substantial price surge, Edwards identifies three critical factors: higher average ETF buying, reduced selling by long-term holders, and growth in U.S. or global liquidity.

One significant factor is the behavior of long-term holders, those who have held Bitcoin for more than two years. This group has been selling more frequently in 2024, reducing their share of the total Bitcoin supply by about 3% over the past six months. While 3% might seem small, it amounts to approximately 630,000 Bitcoin, which is about three times the total amount purchased by all Bitcoin ETFs in the U.S.

In summary, while ETF inflows are positive, they are currently insufficient to drive a significant price increase. The overall market dynamics, including long-term holder behavior, macroeconomic conditions, and the expansion of ETFs into other major markets, play a crucial role in influencing Bitcoin's price.