Recently, CryptoQuant founder Ki Young Ju expressed concerns about the continuous influx of capital into spot Bitcoin ETFs. He warned of a potential sell-side liquidity crisis within six months if this trend persists. Ju emphasized that bears will not be able to win this game until the inflow of spot Bitcoin ETFs stops. In the past week alone, there have been netflows exceeding 30,000 BTC into spot Bitcoin ETFs, with major players such as exchanges and miners collectively holding approximately three million BTC.
According to recent data from BitMEX Research, spot Bitcoin ETFs have surpassed the $10 billion inflow mark for the first time since their launch in January. This surge in inflows has raised concerns among market observers about the potential for a future sell-side crisis. Ju further forecasted that once the tipping point from spot Bitcoin ETF demand is reached, the impact on BTC’s price could exceed market expectations. A sell-side liquidity crisis could lead to a cyclical top exceeding projections due to limited sell-side liquidity and a thin orderbook.
Ju also noted an uptrend in BTC held by “accumulation addresses” which are wallets characterized by only inbound transactions. However, he stated that the accumulation address must reach around 3 million BTC for the crisis to happen. Recent findings show a notable surge of capital directed towards spot Bitcoin ETF products within the U.S. market. On March 11 alone, $505 million in netflows was recorded, with BlackRock leading the way with daily inflows amounting to $562 million.
VanEck’s HODL product also observed a noteworthy uptick, with inflows soaring to $118 million on the same day. This surge can be attributed to a fee waiver campaign initiated by VanEck effective from March 12 until March 31, 2025. During this period, fees for the product will be waived until its assets reach $1.5 billion, after which a 0.20% fee will be imposed.
The continuous influx of capital into spot Bitcoin ETFs raises concerns about a potential sell-side liquidity crisis in the future. Market observers and analysts, including CryptoQuant founder Ki Young Ju, are keeping a close eye on these developments and the impact they could have on the price of BTC. With major players in the market accumulating large amounts of BTC, the situation is one to watch closely in the coming months.