Bitcoin has risen by 14.74 per cent in the last month, just shy of a record high, climbing as far as $73,149 on October 29, according to CoinMarketCap. CryptoQuant CEO Ki Young Ju points to a critical factor needed to maintain this momentum: From stablecoins and Bitcoin ETFs, they brought in enhanced liquidity.
On November 1, Ki, himself, highlighted on X (formerly Twitter) that Bitcoin buying pressure may exceed the available amount that is currently provided by stablecoins. Currently, only 21% of the market, or $34 billion of $166 billion, of all Stablecoins is on exchanges, as these are predominantly used by traders to buy volatile assets like Bitcoin thanks to their dollar-pegged value.
Bitcoin Needs ETFs to Sustain Price Rally
This limited liquidity may limit BTC potential upward. Now, Ki observes, BTC -to-stablecoin reserve ratio of 6.05 matches the level at the BTC last all time high. Spot BTC ETFs and Coinbase USD reserves will need to be able to provide additional liquidity to sustain the rally, he suggests.
Investors have poured over $5 billion into spot BTC ETFs in the last 3 weeks. Interestingly, the rally was driven by BlackRock’s IBIT fund, which put $4.44 billion. If that pace of ETF inflows continues the buying pressure will still likely stay strong, and especially from brokerage firms like Coinbase Prime.
Nevertheless, any slowing down could see BTC consolidate. Currently, BTC is trading at $69,608, down 1.32% in the last 24 hours, with volume up 25.61% trading at $51.56 billion at press time.
The possibility exists for a renewed push above $73,000, if ETF inflows continue and in the wake of the upcoming U.S. elections. An administration that’s pro crypto under Donald Trump could send BTC to new highs, with some even predicting levels upwards of $90,000 to $100,000 by the end of 2024.
