An analysis by industry expert Ki Young Ju suggests that Bitcoin could be on the verge of a sell-side liquidity shortage by September if the current influx of corporate investments persists. The CEO of CryptoQuant, a data analysis platform, believes that the supply of Bitcoin could be strained due to the tremendous success of U.S.-based spot Bitcoin exchange-traded funds (ETFs).
ETFs Driving Up Demand
Spot Bitcoin ETFs, which hold approximately $30 billion in assets, have made a significant entrance into the investment scene. Ki Young Ju notes the extraordinary uptake of these ETFs, warning that Bitcoin might not be plentiful enough to satisfy the growing corporate appetite. The influx of over 30,000 Bitcoins into ETFs in just one week underscores the intensifying demand.
The Impact on Bitcoin’s Market
Ki Young Ju points out that the Grayscale Bitcoin Trust (GBTC) is experiencing massive daily outflows, which could become a turning point in the market trend. Despite the outflows, the value of GBTC’s Bitcoin assets has remained relatively stable due to the increase in Bitcoin’s price. The analyst foresees a potential price surge exceeding expectations when a supply crisis, fueled by ETF demand, hits the market.
Further bolstering the anticipation of a liquidity crisis, Ki Young Ju highlights the growing number of Bitcoins held in accumulation addresses, which are characterized by only receiving deposits and not making withdrawals. This trend suggests a broad uptrend in Bitcoin accumulation, which could exacerbate the forthcoming shortage.
The anticipation of a liquidity crisis comes at a time when many investors and industry observers are closely monitoring the market dynamics of Bitcoin, especially in light of the burgeoning ETF sector which is reshaping how the cryptocurrency is accessed and held by institutional investors.