Author: Willy Woo, crypto analyst; translation: 0xjs@黄金财经
ETFs are buying… institutions are buying… who is selling?
In 2024, a lot of commentators began to focus on ETF flows, as if that was all that mattered.
What matters is total demand and total supply.
This article tells you the basics of how the Bitcoin market works right now.
First, let me tell you who is selling. The OGs. They are selling.
They own more BTC than all the ETFs combined… 10x more. And they sell in every bull market.
This pattern is as old as the genesis block. Below: Age x number of tokens being sold.
We are now in the modern era of BTC.
Paper BTC has flooded the market since 2017. Futures market.
If you want to buy BTC, you used to have to buy real BTC. Now you can buy paper BTC.
So, a no-coiner can sell you that paper BTC. Together you have made a synthetic BTC.
The latent demand for BTC is being shifted to paper BTC, met by OTC traders who have no BTC to sell and only USD to back their bets.
In the past, BTC would have grown exponentially because the only sellers were a trickle from OGs and an even smaller amount of newly mined coins from miners.
Today, the magic of paper BTC is what you want to focus on.
The 2022 bear market was defined by the massive influx of paper BTC when spot holders didn't actually sell.
In the current bull market, I marked places where paper BTC rose, and these were times when the price didn't rise. We are in one of those times right now.
So… focusing on ETF purchases alone is not a good idea.
On-chain data…derivatives data…price technical indicators…all add to the demand and supply picture.
Putting it all together is an art, not a quantifiable science.
Everyone is just making an educated guess.
Alan Knitowski ∞/21M: Great. The 21M bitcoin supply cap doesn’t matter…or doesn’t apply at all. If you have a fixed BTC supply as monetary policy, it doesn't matter when you can print unlimited paper BTC. Same as the gold market... price will react the same way. Bitcoin is now fiat currency. Awesome.
Not really. When the BTC cap exceeds the USD cap, there is limited firepower to short BTC with USD collateral. Now you understand why Biden's SEC assholes want to enable futures ETFs and block spot ETFs. It's a war going on.
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