$BTC : Potential ETF Liquidity Crisis Expected within Six Months
Bitcoin could face a “sell-side liquidity crisis” by September due to the rapid inflow of institutional funds into Bitcoin ETFs, according to an industry analyst. Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant, speculated on this scenario in a thread on X published today, noting that the crisis could occur within the next six months.
Industry players believe that allocation to Bitcoin by institutions is just beginning, with Bitcoin ETFs having already seen a highly successful launch, holding nearly $30 billion. However, if the current inflow trend persists, there could be a shortage of available Bitcoin to meet demand, putting Bitcoin bears in a bind.
Ki highlighted that this week alone, ETFs have accumulated more than 30,000 BTC, while exchanges and miners hold around 3 million BTC, of which 1.5 million BTC are from US entities. At this rate, a sell-side liquidity crisis could occur within six months.
In contrast, the Grayscale Bitcoin Trust (GBTC) has seen daily outflows typically reaching $500 million, but despite this, the value of GBTC's BTC holdings has remained virtually unchanged. This could pose a problem in the future, especially when demand for ETFs reaches tipping point, potentially impacting the price of Bitcoin beyond market expectations.
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