Liquidity in the cryptocurrency market has already been improving since the launch of spot Bitcoin ETFs in the US, despite speculation that increased demand from these ETFs will lead to a supply crunch.
Bitcoin advocates, such as Michael Saylor, president of MicroStrategy, and Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, see demand from newly launched funds at least 10 times the number of new tokens. Which are minted by cryptocurrency miners, which increased the price of the largest cryptocurrency by 20% this year. However, market data shows that there is a large number of tokens in circulation.
For his part, Michael Savai, co-founder of quantitative trading firm Dexterity Capital, said: “There is a lot of liquidity, but it is very skewed to the demand side. But there is a lot of liquidity on both sides,” referring to the limit. The lowest price that a seller is willing to accept.
Traders said that while spot bitcoin ETFs have attracted billions of dollars, a large proportion of inflows likely came from redemptions moving from the Grayscale Bitcoin Trust to lower-cost competitors.
About $7 billion in investments have been withdrawn from the $24 billion investment fund since it was transferred from a trust fund. Bankrupt cryptocurrency companies FTX and Genesis were among the largest holders of Grayscale Bitcoin Trust assets.
Further selling pressure could occur as these companies redeem units and pay off creditors, while selling from miners is on the rise in part due to an upcoming update to the Bitcoin trading code in the so-called “halving”, which is set to significantly reduce cryptocurrency mining revenues. Big. (Bloomberg)
2024-02-17 19:09:23
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