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As Asia begins a new trading week, bitcoin
In an era of continued sizeable BTC buys from Michael Saylor’s Strategy (MSTR), sustained BTC Exchange Traded Fund (ETF) inflows, and more companies adopting a BTC treasury strategy, one has to wonder why bitcoin’s price hasn’t shot past all time highs.
A new report from CryptoQuant spells it out: all of this institutional action isn’t making up for a general decline in spot demand for BTC.
“The annual growth of Bitcoin demand shows a similar picture: ETFs and MSTR purchases are a portion of Bitcoin demand, overall demand contraction is more than offsetting these purchases, and the acceleration of overall demand growth is what drives price rallies,” CryptoQuant wrote in a recent report.
CryptoQuant points out that over the last 30 days, there’s been a contraction in demand for BTC to the tune of -895K.
In addition, compared to December, ETF and MSTR buys are slowing. In the last month of the year, ETFs bought 86,000 BTC and MSTR 171,000, while in the last month those numbers are down significantly. ETFs only purchased 40K BTC while MSTR bought 16K.
BTC is stuck in a consolidation phase and demand isn’t there to fuel a breakout, CryptoQuant writes.
One additional datapoint for proof of slowing demand is BTC’s nearly empty mempool, which demonstrates how little retail spot demand the market has.
The question is, if institutional buys continue to slow, how much resistance will it put on BTC’s price?
SkyBridge Capital’s Anthony Scaramucci is on the record as saying that the BTC treasury trend — a reliable source of demand for bitcoin — will fade.
“Right now we’re having this replicative treasury company idea,” Scaramucci said during an interview with Bloomberg last week. “So, you know, it will fade.”
“Saylor’s case is different, because he’s got a couple different products going now,” Scaramucci continued in the interview. “I’m not negative on the others, because I’m too bullish on bitcoin, but I would just say as an investor, you have to look through the underlying costs associated with each one of these treasury companies.”
Meanwhile, Standard Chartered remains a BTC bull with the bank maintaining its $200K price target for the world’s largest digital asset.
