Markus Thielen, founder of 10x Research, said ETF inflows may overstate direct demand for Bitcoin (BTC), while options activity and holder sales have made sharp rallies less frequent.
Thielen attributed the pattern to institutions selling call options after prices rise and large holders taking profits. He said Bitcoin has become more responsive to Wall Street trading strategies and macroeconomic news. Economic data and Federal Reserve decisions can trigger bursts of activity, after which participants may wait for another catalyst, he said. Thielen added that each cycle brings a different mix of promoters and investors.
Of the roughly $60 billion in net inflows into U.S. spot Bitcoin ETFs that he reviewed, Thielen estimated market makers accounted for as much as half. He said some ETF positions were used to hedge options trades, so the flows may not all represent direct bets on higher Bitcoin prices. He also identified institutions and sovereign wealth funds as potential buyers.
The Federal Reserve held its target range at 3.75% to 4% on Oct. 28, after raising it by a quarter-point on Sept. 16. Thielen expected one more increase by December, with the pace of any later hikes becoming more cautious.
