US investors are controlling BTC price thanks to good liquidity?

[MrSpasybo]

I once had a topic about the expectation of a positive impact of capital flows from China to the crypto market^[1], but it seems that the liquidity of the BTC market is maintained by US exchanges.

First of all, we need to understand Market liquidity: It refers to the ease with which an asset can be bought or sold at a fair price. It is an essential factor for any healthy market, as it allows investors to enter and exit positions without significantly impacting the price^[2].

US exchanges, while representing a smaller portion of the total trading volume, contribute significantly to Bitcoin's market depth. This suggests that US exchanges are particularly adept at handling large trades without causing major price disruptions.

"The fact that US exchanges account for a significant share of global liquidity (49%) yet contribute a relatively small portion to global trade volume (13.66%) suggests that they are highly liquid.

This hypothesis is further confirmed by looking at the exchanges’ market share of 2% depth. Bitfinex accounts for the largest share, with 23.12%. Coinbase comes second with a 19.18% share, while Binance ranks 3rd with a 14.75% share and Kraken 4th with a 12.96% share^[3]."

This really surprised me when nearly half of the liquidity was concentrated in a single market, the US. I would be more accepting if this number was only 20%-30%. But considered carefully, this data is also reasonable to explain many important fluctuations in the market. BTC Spot ETPs were approved in the EU in 2019^[4] and Canada in 2021^[5] but their popularity and impact on the BTC market is negligible. On the contrary, before the BTC Spot ETF was approved in the US in January this year^[6], we witnessed a strong media wave about the BTC Spot ETF and its strong impact on the BTC price chart from when BlackRock filed an SEC application for this product. The movement of the 2% volatility zone thanks to the positive impact on investor sentiment has helped BTC price grow sustainably in the second half of 2023.

Currently, as BTC Spot ETF net inflows continue to increase, buying pressure in the US is supporting BTC prices extremely well in the $50K-53K zone. As the BTC Spot ETF will reach more investors through consulting services and pension funds, I believe an explosion on the BTC price chart is inevitable. Thanks to its extremely good liquidity, the US BTC market is having a huge influence on BTC price and the development of the entire crypto market.

What do you think about the extremely good liquidity of the BTC market in the US? Do you think this will help the buying/selling behavior of US investors be decisive for BTC price and the future crypto market? And is this good or bad for the crypto market?
[1] If China soon welcomes crypto: strong bullrun?
[2] Understanding Liquidity and How to Measure It
[3] How do US exchanges contribute to Bitcoin’s market liquidity?
[4] WisdomTree Slashes Fees of European Physically Backed Bitcoin ETP
[5] Canada's Venture into Spot Bitcoin ETFs
[6] The SEC has approved bitcoin ETFs. What are they and what does it mean for investors?

[TomPluz]

This really surprised me when nearly half of the liquidity was concentrated in a single market, the US. I would be more accepting if this number was only 20%-30%. But considered carefully, this data is also reasonable to explain many important fluctuations in the market. BTC Spot ETPs were approved in the EU in 2019^[4] and Canada in 2021^[5] but their popularity and impact on the BTC market is negligible. On the contrary, before the BTC Spot ETF was approved in the US in January this year^[6], we witnessed a strong media wave about the BTC Spot ETF and its strong impact on the BTC price chart from when BlackRock filed an SEC application for this product. The movement of the 2% volatility zone thanks to the positive impact on investor sentiment has helped BTC price grow sustainably in the second half of 2023.

I was wondering of the same thing, how come the same ETFs approved in other side of the world failed to create the kind of impact that ETFs in USA recently generated for Bitcoin and it is all about the fact that USA is a big leader when it comes to depth of liquidity and thus its command in the market is very much influential all throughout the cryptocurrency market. And I am expecting that this leadership will continue for many, many years and can even expand in the foreseeable future unless the USA will do the China thing. I would say that overall this big liquidity is providing the environment where people and financial institutions can trust more of an asset - in this case Bitcoin - to be worthy of their money to get into. Liquidity or the lack of it can spell doom to any asset and I think nobody in his right mind will invest big with something that has a big problem of liquidity in the market...so we can also say that liquidity is a sort of a vote of trust for the asset in question.

[Stompix]

This really surprised me when nearly half of the liquidity was concentrated in a single market, the US.

Why?
The US completely dominates every single aspect of every financial market, when it comes to Bitcoin it is home to the largest share of miners, 85% of all the batms in the world, most nodes, most LN nodes, most shops accepting currencies, now largest ETFs, largest custodial services, they have tons of individuals and companies owning crypto, and they have the money!!!
What would be weird would be to see Mongolia or any other country as number 1!

US exchanges, while representing a smaller portion of the total trading volume, contribute significantly to Bitcoin's market depth. This suggests that US exchanges are particularly adept at handling large trades without causing major price disruptions.

Or, and it's not like that hasn't happened before, the rest are faking their volume as they have been doing for a decade already
https://www.coindesk.com/markets/2013/12/21/chinese-bitcoin-exchange-okcoin-accused-of-faking-trading-data/

[Don Pedro Dinero]

My answer is no if by 'controlling' we mean a collection of investors buying and selling in unison with a clear intention to manipulate the market. As Stompix has said, it is not surprising that the greatest liquidity in the market is provided by the US, but it is a long way from thinking that all major investors in the US have the same interests. Yes, now with the approval of bitcoin spots ETFs there may be greater manipulation capability, but it is still limited.

[KryptoBull]

This really surprised me when nearly half of the liquidity was concentrated in a single market, the US. I would be more accepting if this number was only 20%-30%. But considered carefully, this data is also reasonable to explain many important fluctuations in the market. BTC Spot ETPs were approved in the EU in 2019^[4] and Canada in 2021^[5] but their popularity and impact on the BTC market is negligible. On the contrary, before the BTC Spot ETF was approved in the US in January this year^[6], we witnessed a strong media wave about the BTC Spot ETF and its strong impact on the BTC price chart from when BlackRock filed an SEC application for this product. The movement of the 2% volatility zone thanks to the positive impact on investor sentiment has helped BTC price grow sustainably in the second half of 2023.

What do you think about the extremely good liquidity of the BTC market in the US? Do you think this will help the buying/selling behavior of US investors be decisive for BTC price and the future crypto market? And is this good or bad for the crypto market?

The US is still the main market for major markets such as stocks, commodities and now crypto thanks to large capital sources. Americans have a much higher income than the world average, so the small portion of their income poured into financial markets is enough to create superior liquidity compared to the rest of the world. What makes me a bit surprised is that even with such a large capital, Americans trade less, creating a trading volume less than 15% of the total global BTC trading volume. Perhaps this is because investment habits or the complexity of tax returns on crypto income have limited the continuous buying and selling behavior of the US investors.

I think this has been shown when assets launched in the US tend to have larger and more sustainable growth. Large cash flows create great liquidity, extremely good support for the main market trend, any temporary price fluctuations will be absorbed and will not create huge fluctuations that cause the trend to change. This is the key for the USD investors to have a major impact on the price trend of BTC over the years.

This can be considered a good thing for the market as the stability of the price chart will make investors feel more secure in the investment process, without being too afraid of unusual fluctuations that can blow away all their assets.

[yhiaali3]

It is natural that the largest liquidity for the Bitcoin market comes from the United States because it is the largest financial and business center and has the largest investment companies in the world. In short, it is the engine of the global economy as a whole, so it is very natural that it is the engine of the crypto markets as well.

As for your question “Is this good or bad for the cryptocurrency market?” There is a positive side because good liquidity provides relative stability to the market and increases the confidence of large investors in the market. As for the negative side, the accumulation of about 50% of liquidity in the United States threatens the danger of centralization and also the American government’s control over this market, which is absolutely unhealthy.

[Trongduy]

It is natural that the largest liquidity for the Bitcoin market comes from the United States because it is the largest financial and business center and has the largest investment companies in the world. In short, it is the engine of the global economy as a whole, so it is very natural that it is the engine of the crypto markets as well.

As for your question “Is this good or bad for the cryptocurrency market?” There is a positive side because good liquidity provides relative stability to the market and increases the confidence of large investors in the market. As for the negative side, the accumulation of about 50% of liquidity in the United States threatens the danger of centralization and also the American government’s control over this market, which is absolutely unhealthy.

This is completely normal, the US is still an extremely large market for crypto from the early days, the first people to accept crypto are also in the US. Thanks to the large capital source, high liquidity is maintained, meaning that when there are price fluctuations, they are not too serious, while if American investors are active, the entire peak price range will be pushed up, helping for the BTC price to be extremely well supported.

The trading volume of Asian investors is indeed important, but to influence the price, it still depends on the US market. I think this is also good for the market, because the better the liquidity, the easier it is to buy and sell. I don't worry about the risk of manipulation, because it is an inevitable part of the financial market.

[Fivestar4everMVP]

It is natural that the largest liquidity for the Bitcoin market comes from the United States because it is the largest financial and business center and has the largest investment companies in the world. In short, it is the engine of the global economy as a whole, so it is very natural that it is the engine of the crypto markets as well.

As for your question “Is this good or bad for the cryptocurrency market?” There is a positive side because good liquidity provides relative stability to the market and increases the confidence of large investors in the market. As for the negative side, the accumulation of about 50% of liquidity in the United States threatens the danger of centralization and also the American government’s control over this market, which is absolutely unhealthy.

This is completely normal, the US is still an extremely large market for crypto from the early days, the first people to accept crypto are also in the US. Thanks to the large capital source, high liquidity is maintained, meaning that when there are price fluctuations, they are not too serious, while if American investors are active, the entire peak price range will be pushed up, helping for the BTC price to be extremely well supported.

The trading volume of Asian investors is indeed important, but to influence the price, it still depends on the US market. I think this is also good for the market, because the better the liquidity, the easier it is to buy and sell. I don't worry about the risk of manipulation, because it is an inevitable part of the financial market.

You are right, manipulations is an inevitable part of the financial market, many have manipulated the price of bitcoin in the past even before the US market came in.
So, I would support that, the US market coming in fully into bitcoin investment is a very good and positive news for not just bitcoin, but for the entire crypto currency market at large.
If we noticed, aside from the fact that there is a major resistance at the moment holding the price of bitcoin from reaching and going above $70,000, the price for the past few days have been relatively stable, moving up really slowly, and I think since yesterday, the price of bitcoin have been relatively stable at a little above $69,000, this is unlike bitcoin, price never used to be this stable, and this shows or proves one thing, and that is that, there is a lot of liquidity in the market supporting the price of bitcoin, and this is very healthy for the entire crypto currency market, regardless of the fact that the US market has and control most of this liquidity.

[bitmover]

What do you think about the extremely good liquidity of the BTC market in the US? Do you think this will help the buying/selling behavior of US investors be decisive for BTC price and the future crypto market? And is this good or bad for the crypto market?

I recently saw an interesting report saying that ETF funds own about 3.5% of all bitcoins.

https://markets.businessinsider.com/news/currencies/spot-bitcoin-etfs-btc-crypto-funds-gbtc-ibit-fbtc-ownership-2024-2

I don't think this is too much yet. For example, Coinbase own about 5% of all bitcoin (https://finance.yahoo.com/news/coinbase-holds-5-global-bitcoin-024646722.html)

We now have a few more giants in the space. Is it bad? Not entirely ,competition is always good.
Is it good? For the price, probably yes!

[Stompix]

I recently saw an interesting report saying that ETF funds own about 3.5% of all bitcoins.
I don't think this is too much yet. For example, Coinbase own about 5% of all bitcoin (https://finance.yahoo.com/news/coinbase-holds-5-global-bitcoin-024646722.html)

3.5% here, 5% there, 1% seized by the DoJ, 1% in Micro, Winkle brothers and Tim Draper, we count out 5% of the coins as being actually lost, 5% owned and probably locked forever by Satoshi, and suddenly there is one huge pile and the rest of the world.

[Trongduy]

3.5% here, 5% there, 1% seized by the DoJ, 1% in Micro, Winkle brothers and Tim Draper, we count out 5% of the coins as being actually lost, 5% owned and probably locked forever by Satoshi, and suddenly there is one huge pile and the rest of the world.

I believe that ETF funds in the US are continuing to accumulate more BTC, and they will become a large force capable of influencing the market. BlackRock already has more BTC than MicroStrategy, and this race is making the amount of BTC outside the market even scarcer and pushing up the price.

[MrSpasybo]

I believe that ETF funds in the US are continuing to accumulate more BTC, and they will become a large force capable of influencing the market. BlackRock already has more BTC than MicroStrategy, and this race is making the amount of BTC outside the market even scarcer and pushing up the price.

We are in an uptrend and should focus on the positive impacts from ETFs. The good liquidity in the US market has helped to support the BTC price well in the past, when many holders decided to take profits after the BTC price had increased rapidly. As a result, we have not seen a strong correction on the BTC price chart recently.

Spot ETFs are not only dependent on the will of providers but also on retail investors. As a BTC investor, I am more confident when more money flows into ETF funds and creates a scarcity of BTC on the market because it can cause the BTC price to continue to increase.

BTC Spot ETFs create buying pressure and push the price up, good liquidity helps to absorb selling pressure to prevent a major correction => we have enough mechanisms to support the rising price of BTC.

[Stompix]

I believe that ETF funds in the US are continuing to accumulate more BTC, and they will become a large force capable of influencing the market.

You can track those with sites like https://bitcointreasuries.net/.
There is no need to think about what might be as it's all public data after all, all ETF managers must publish those, since they don't actually own he coins, unlike private companies. Blackrock will keep purchasing Bitcoins through ETF if their clients do so, if not they are not going to buy for themselves through a fund they manage.

Spot ETFs are not only dependent on the will of providers but also on retail investors. As a BTC investor, I am more confident when more money flows into ETF funds and creates a scarcity of BTC on the market because it can cause the BTC price to continue to increase.

I wonder at this point if what's driving up prices is the
a) ETF accumulating Bitcoins and an increase rate
b) holders refusing to sell and keeping their coins of the market as nearly everyone is confident or at least hopes we will breach 100k this year

[pacar_tiri]

I believe that ETF funds in the US are continuing to accumulate more BTC, and they will become a large force capable of influencing the market. BlackRock already has more BTC than MicroStrategy, and this race is making the amount of BTC outside the market even scarcer and pushing up the price.

It should be that when more and more people try to buy Bitcoin and want to have very large amounts of Bitcoin, this will have an influence on the price of Bitcoin on exchanges, but unfortunately currently the condition of exchanges is collapsing. Now how can we assume that BlackRock and MicroStrategy are always buying and accumulating very large amounts of Bitcoin if we see that the price of Bitcoin on exchanges is now on its way to collapsing.

[MrSpasybo]

I wonder at this point if what's driving up prices is the
a) ETF accumulating Bitcoins and an increase rate
b) holders refusing to sell and keeping their coins of the market as nearly everyone is confident or at least hopes we will breach 100k this year

Yeah, they are some factors that are supporting the price increase of BTC, including real buying force from ETF providers on OTC and the optimistic (or greedy) psychology of investors. In addition, the manipulation from MM is also quite clear: they are also accumulating BTC, and at the same time minting more stable coins to be ready to buy more BTC and ALTS before the bullrun officially starts right after the halving.

Currently, BTC is correcting in the 6x zone, I really hope that the extremely good liquidity of the US market can support and help BTC price not fall too deep. If BTC price continues to decrease, I am afraid that many ALTS may return to the bottom zone