Glassnode’s new report discusses the reasons why Bitcoin is moving in the wrong direction despite the fact that there are inflows to the exchange-traded fund (ETF) for spot.
Why Bitcoin has been stagnant despite spot ETF inflows
The analytics firm released its weekly report in the latest edition. Glassnode The impressive inflows of money into the US spot ETFs The price has failed to break out of its sideways movement.
Investors have a new way of getting exposure to cryptocurrency with the spot ETFs that the US Securities and Exchange Commission approved this January.
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The funds hold Bitcoins on behalf of the users. This allows them to get a direct exposure to Bitcoin’s movements in price without actually having to own it. own The asset is itself.
Traditional investors don’t have to worry about navigating cryptocurrency exchanges and wallets. They can invest in spot ETFs.
Spot ETFs, since their inception, have seen a large increase in demand. These fresh capital flows initially helped BTC reach a new high, but the asset is now consolidating.
The chart below shows the reserve combined of the large funds in this sector.
The graph shows that spot ETFs have 862,000 BTC. It’s more than the miner (excluding Patoshi), who hold 706,000 BTC, but less than the reserve held by the central exchanges (2.35 million BTC).
Glassnode is a cryptocurrency exchange that has been noted by Glassnode. Coinbase The custody service alone is responsible for a significant part of total US ETF spot balance and US Exchange Reserve.
“With Coinbase serving both ETF clients and conventional on-chain asset holders, the gravity of the exchange in the market pricing process has become significant,” Read the entire report.
Up until the mid-April, the data on whale deposits at the platform showed a positive trend.
According to an analytics company, a substantial portion of this whale deposit had been made by the Grayscale Bitcoin Trust. (GBTC), which added selling pressure to the market.
It’s possible that the rapid growth of whale exchanges is a factor in why spot ETFs aren’t as successful. The trend of the futures markets can also be a factor in this consolidation.
Below is a chart that shows CME’s Future open interest Recent levels of activity have been very high.
This could indicate that more traders are adopting cash-and carry arbitrage strategies, according to the report.
The arbitrage is a neutral position that involves the acquisition of a spot long position and the selling (shorting) of an underlying futures contract for the same asset, which trades at a higher premium.
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The spot ETFs could have recently had only a neutral influence on Bitcoin’s prices.
BTC Price
Bitcoin’s price has risen by more than 4 percent in just 24 hours, and is back at $69700.
Chart from TradingView.com. Image from Dall-E.
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Source: www.newsbtc.com