Glassnode has discussed in a new report the reasons behind Bitcoin moving sideways despite inflows into the spot exchange-traded funds (ETFs).
Why Bitcoin Has Been Stagnant Despite Spot ETF Inflows
In its latest weekly report, the analytics firm Glassnode has talked about how the impressive inflows into the US spot ETFs have failed to make the price break its sideways trend.
The spot ETFs, which the US Securities and Exchange Commission (SEC) approved in January of this year, have provided investors with an alternate means of gaining exposure to the cryptocurrency.
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These funds buy and hold Bitcoin on behalf of their users, letting them get indirect exposure to the coin’s price movements without having to own the asset itself.
The more traditional investors, who don’t want to attempt to navigate cryptocurrency exchanges and wallets, have found the spot ETFs to be a comfortable investment option.
Since their launch, the spot ETFs have brought large demand for the asset. Initially, these fresh capital inflows helped BTC rise to a new all-time high (ATH), but recently, the asset has been consolidated.
Below is a chart that shows how the combined reserve of these funds compares against the other large entities in the sector.
From the graph, it’s visible that the spot ETFs hold 862,000 BTC. This is more than what the miners (excluding Patoshi) hold (706,000 BTC) but notably less than the reserve of the centralized exchanges (2.3 million BTC).
Glassnode has noted that the cryptocurrency exchange Coinbase alone holds a big part of the total exchange reserve and the US spot ETF balance through its custody service.
“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,” reads the report.
The data for the whale deposits to the platform reveal a rising trend until mid-April.
According to the analytics firm, a significant portion of these whale deposits had come from the Grayscale Bitcoin Trust (GBTC), adding to the selling…
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