Tom Lee, co-founder of Fundstrat, thinks Bitcoin’s price isn’t mooning despite hugely successful ETF launches, and he has two theories.
ETF Strategies and Price Impact
Lee suggests that the way Bitcoin ETFs are accumulating Bitcoin might be a factor. Many ETFs are accepting Bitcoin directly from investors (“in-kind exchange”). This means investors hand over their Bitcoin, increasing the ETF’s holdings without necessarily driving up the market price.
Early Investors Cashing Out
Lee’s second point is that early Bitcoin investors, who bought at much lower prices, are now taking profits. He cites examples of clients who bought Bitcoin for $100 and are now sitting on six-figure gains. These investors might be happy selling around the current price, even if Bitcoin could potentially reach much higher levels. This profit-taking, he argues, is creating a “churn” in the market, preventing a significant price surge.
The Big Picture
Despite the lack of a massive price jump, Bitcoin ETFs have seen a massive influx of cash – around $48.6 billion since January 2024. However, Bitcoin’s price remains relatively stable, around $107,290, similar to its price in December 2024. Lee’s analysis suggests that the market is currently grappling with these two opposing forces: huge ETF investment and early investors taking profits.
