Tom Lee, co-founder of Fundstrat Global Advisors, shared his insights on the stagnation of Bitcoin prices despite growing interest from institutional investors.
Success of Bitcoin ETFs
Tom Lee pointed out that Bitcoin ETFs have become one of the most successful ETF launches in history. He highlighted significant inflows into these instruments, indicating strong interest in Bitcoin from institutional investors.
Reasons for Price Stagnation
Despite the rising demand, the price of Bitcoin has not increased. Lee explained that many corporate entries are not made via new purchases but through the 'in-kind' method. This means investors who already own Bitcoin are simply transferring their assets from cold wallets to the ETF managers’ wallets.
Tom Lee's Opinion
Lee expressed the view that such transfers do not create additional buying pressure on Bitcoin and therefore do not contribute to price increases. 'I see this process in Bitcoin as a kind of neutral transfer. Since no new Bitcoins are being purchased and existing BTCs are being moved, it does not have a significant impact on the price. Because the price of Bitcoin follows a simple demand-supply mechanism.' CITE_NA.
Thus, despite the broad interest in Bitcoin from institutional investors, the method by which many transactions are conducted impedes price growth.
