Bitcoin Inflows Continue To Get The Edge
Also Strategy Now A Four Times Bitcoin Seller & Inflation Easing For Two Months In A Row
Welcome to Ecoinometrics’ Friday edition.
Each week, we analyze the three most critical market signals impacting Bitcoin and macro assets, delivering institutional-grade insights through data-driven charts and analysis.
Today we’ll cover:
Bitcoin Inflows Continue To Get The Edge
Strategy Now A Four Times Bitcoin Seller
Inflation Easing For Two Months In A Row
When you are looking at the market, you don’t want to treat every improvement as if it carries the same weight. Some developments genuinely change the outlook. Others simply make the market a little less bad than it was before. You need to know the difference before reacting to the headlines.
In case you missed it, here are the other topics we covered this week:
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The Ecoinometrics Decision
Bitcoin Inflows Continue To Get The Edge
Bitcoin hasn’t done much over the past few weeks, staying in the $62K to $65K range. So is the market is simply catching its breath or rolling over again?
As usual, the best place to look for the answer isn’t the price itself. It’s the money flowing into the Bitcoin ETFs.
And there is good news on this front. Inflows have consistently outpaced outflows. We’re not seeing spectacular buying every day, but the balance has clearly shifted back in favour of demand. The pattern is now much closer to the recovery phase we saw in April and May than to the persistent selling that dominated much of this bear market.
That’s encouraging because April and May remain the only period where ETF demand managed to support a sustained recovery attempt. Today’s market is beginning to resemble that environment again.
That doesn’t guarantee higher prices in the short term. But as long as inflows continue to have the edge, the underlying demand picture continues to improve.
Strategy Now A Four Times Bitcoin Seller
One of the defining features of the last six years was that Strategy kept buying Bitcoin almost regardless of market conditions. That is no longer true.
After accumulating nearly 850,000 BTC over six years, the company has now sold Bitcoin on four separate occasions. The total amount is only around 7,000 BTC, so these sales don’t materially change its long-term position. But selling has become part of the playbook.
The reason isn’t hard to understand. Strategy is managing a much more complex balance sheet today than it was a few years ago. Maintaining cash gives it more flexibility to support its financing strategy, buy back preferred shares if needed, and navigate a market where raising fresh capital isn’t as straightforward as it was during the bull market.
That’s a completely rational strategy from their perspective. And it doesn’t mean they have abandoned Bitcoin a long term opportunity.
But what it does mean is that Strategy doesn’t think this bear market is anywhere near its end. Otherwise it would make more sense for them to hold on to their holdings and wait for their stock to rise as Bitcoin recovers.
So if Strategy doesn’t see the end of this bear market, maybe you shouldn’t assume either that the recovery is around the corner.
Inflation Easing For Two Months In A Row
This week’s inflation report brought another piece of good news. Headline CPI has now slowed for two consecutive months, giving investors more confidence that inflation is moving in the right direction.
But the problem is that moving in the right direction isn’t the same thing as getting back to normal.
Three years after inflation peaked, headline CPI is still running at 3.3% year-on-year. That’s well below the highs of 2022, but it’s also well above the Federal Reserve’s 2% target. The latest data suggests inflation is easing but it is only easing back to where it was earlier this years.
A slower inflation rate reduces the pressure on the Fed to tighten policy further. However that doesn’t mean interest rates will get lower. And that definitely doesn’t mean we’ll see rate cuts any time soon.
All that means is the macro backdrop has become a little less restrictive. We’ll need more to say there is a tailwind for Bitcoin.
That’s it for today. Thanks for reading.
Cheers,
Nick
P.S. Every week, our team conducts extensive research analyzing market data, tracking emerging trends, and creating professional-grade charts and analysis.
Our mission: Deliver actionable macro and Bitcoin insights that help institutional investors and financial advisors make better-informed decisions.
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