Bitcoin ETF Inflows Could Trigger a ‘Sell-Side Liquidity Crisis,’ Warns CryptoQuant
Institutional inflows into spot Bitcoin (BTC) ETFs could lead to a “sell-side liquidity crisis” by September, according to industry analyst Ki Young Ju, CEO of on-chain analytics platform CryptoQuant.
In a thread on X , Ki predicted a watershed moment in BTC supply within the next six months.
He said that the rise of Bitcoin as an institutional investment is just beginning, with spot Bitcoin ETFs gaining significant traction in the United States.
Currently holding close to $30 billion, BTC ETFs have experienced the most successful launch in the history of ETFs.
However, if this trend continues, it could create a new phenomenon where the demand for Bitcoin surpasses the available supply, effectively creating a Bitcoin ETF liquidity crisis.
Ki emphasized that as long as spot Bitcoin ETF inflows persist, the bears in the market will struggle to gain the upper hand.
He pointed out that ETFs alone accumulated over 30,000 BTC in the previous week, while exchanges and miners hold approximately 3 million BTC, with US entities alone holding 1.5 million BTC.
“Last week, spot ETFs saw netflows of +30K BTC. Known entities like exchanges and miners hold around 3M BTC, including 1.5M BTC by US entities,” he continued.
“At this rate, we’ll see a sell-side liquidity crisis within 6 months.”
This scenario would create a scarcity of Bitcoin available for sale.
#Bitcoin is currently in the price discovery phase.
Once a sell-side liquidity crisis happens, its next cyclical top may exceed our expectations due to limited sell-side liquidity and thin orderbook.
This could occur once accumulation addresses reach around a total of 3M BTC. pic.twitter.com/HgwGbHR8fL
— Ki Young Ju (@ki_young_ju) March 12, 2024
The Grayscale Bitcoin
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