Bitcoin Metrics Indicate Slowing Demand and Weakened Growth: CryptoQuant

Bitcoin’s demand dynamics have weakened, with growth slowing significantly, according to data from South Korean firm CryptoQuant. Large Bitcoin investors, who had been increasing their holdings by 6% monthly, are now growing at just 1%.

As of Wednesday, Bitcoin is trading around $60,700, falling short of the $70,000 mark. The reduced demand coincides with a decline in purchases from spot ETFs in the United States. CryptoQuant’s latest report notes a sharp decrease in average daily Bitcoin purchases by U.S. spot ETFs, dropping from 12,500 Bitcoin in March, when Bitcoin was above $70,000, to just 1,300 Bitcoin last week.

Bitcoin Spot ETF Interest Declines in the U.S.

The drop in ETF activity mirrors a diminished appetite for Bitcoin in the spot market. This trend is further reflected in the shrinking price premium for Bitcoin on Coinbase, a major U.S. cryptocurrency exchange. A lower premium suggests weakened buyer demand, contributing to Bitcoin’s price stagnation.

Despite concerns over reduced spot demand and its potential impact on Bitcoin’s price recovery, other indicators suggest the market is not entirely bearish. Long-term holders continue to show confidence by accumulating Bitcoin at unprecedented levels. CryptoQuant’s data reveals that these investors are adding to their holdings at a record-high monthly rate of 391,000 Bitcoin, signaling optimism about Bitcoin’s future despite short-term volatility.

Stablecoin Market Cap Reaches New High

In contrast to Bitcoin’s slowing demand, the total market capitalization of stablecoins has surged to a record $165 billion. This growth in stablecoin capitalization indicates increasing liquidity in the broader crypto market, suggesting that participants are positioning themselves for potential future investments once Bitcoin demand rebounds.

Overall, while Bitcoin’s immediate demand appears weak, the ongoing accumulation by long-term holders and rising liquidity in the crypto market reflect a more nuanced picture of investor sentiment.