Bitcoin's Liquidity Situation \ stacker news ~bitcoin

1614 sats \ 7 comments \ @Cje95 26 Mar bitcoin

Earlier this month I stumbled across an article discussing the idea that Bitcoin was about 6 months away from a sell-side liquidity crisis due to ETFs continuing to grow their BTC amount at a high rate. This article's information came from Ki Young Ju Founder and CEO of Cryptoquant an on-chain analytics platform. After seeing this article I made a note to come back in a few months and see how this prediction had shaken out however, it turns out I did not need to wait nearly that long.

Yesterday it came out that the supply of BTC on Coinbase had hit a 9-year low. With Coinbase playing such a large role in these ETFs and institutional investors overall it is a pretty significant development. Since I had only just a couple of weeks earlier read that the shortage was going to occur in 6 months I decided to go back to Ki Young Ju's X to see what he had posted since March 12. His posts and the data he provides make a ton of sense and are something I agree with. Recent price increases have not been driven by the halving event but rather by the Spot ETFs acquiring so much Bitcoin. In his posts, he mentions that the cost per coin to mine after halving will go up to $37k which is fine with BTC sitting at $69/70k.

One thing he pointed out that I was extremely interested in was the average price of BTC that new whales have paid compared to previous ones. Below is a graph that he posted to his X account

Graph from Ki Young Ju

These new whales' average is $56.4k compared to $21.3k for old whales. New whales also became whales I doubt anyone surprise via the Spot ETFs as well. Short-term whale holders are up 16% already in unrealized profit. This includes the Spot ETFs and results in an unrealized profit total of over $16.3 billion. This I think helps highlight how the Spot ETFs have affected the market. In the graphs below you can see the historical relation short-term whales have had to profit.

Graphs from Ki Young Ju

Thanks to just doing what I tend to do in the morning I was able to stumble across an article that led me to Ki Young Ju's X account. The information and data he has is something that fascinated me as it covers not only what is going on now but what is on the horizon. It will be extremely interesting to me to see how the halving affects the price of BTC and will we start to see more DeFi BTC or will Coinbase pump the price buy purchasing more BTC to replenish its coffers. Only time will tell!

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41 sats \ 5 replies \ @grayruby 27 Mar

Coins will become liquid as price goes up. Price just needs to go high enough to encourage sellers.

60 sats \ 3 replies \ @TwoLargePizzas 27 Mar

This is true. The question is, at what price will people a part with their coins? The answer is different for everyone and for some people the answer is still never.

Recent price increases have not been driven by the halving event but rather by the Spot ETFs acquiring so much Bitcoin.

In some sense, these things are all connected. Presumably people buying the ETFs know the halving is coming. It's rarely one reason or another, it's the markets collective understanding of everything that causes them to decide to buy or sell.

30 sats \ 2 replies \ @Cje95 OP 27 Mar

I tend to think that miners might be the ones dumping right now to shore up money given the brutal time they have had the last couple of years esp with power prices. Its a big gamble to keep them until halving so it would make sense they are at least selling off part of their miner amount to set themselves up for the long term!

60 sats \ 1 reply \ @TwoLargePizzas 27 Mar

Yep. There is data that supports what you're saying. The truth is the miners are just like everyone else with an additional incentive to sell to stay in business. Some of them sell more often and some try to hold on longer. There's no universal strategy.

The real kicker though is that the demand coming from the ETFs is a lot higher (some reports say 6x to 10x) more than what the miners are producing. The data shows most of the selling is actually still coming from GBTC but it's only a matter of time before they run out.

51 sats \ 0 replies \ @Cje95 OP 27 Mar

Yeah GBTC was having to sell big time and I know from being part of it that the Gemini Earn program forced Genesis to sell hundreds of thousands of shares the last couple of weeks as part of the Gemini Earn settlement that was reached between the two

30 sats \ 0 replies \ @Cje95 OP 27 Mar

I think you are right and that in itself is why I see there being some pretty major upside to crypto in 5-6 months. The ETFs will have gotten all that they can easily while the halving will have taken place compounding it!

0 sats \ 0 replies \ @Coinsreporter 27 Mar

I won't part with my coins at any price. However I part with them whenever I intend to buy something that is worth putting away my coins.