Bitcoin Sets New Record: Where is the Demand Coming From?

Carmen Brooke Martin
By Carmen Brooke Martin Add a Comment
3 Min Read

Bitcoin (BTC) has surged to unprecedented levels, hitting new all-time highs and propelling the total crypto market cap beyond $2.7 trillion—the year’s peak. This rally has been fueled by a combination of factors, including Donald Trump’s U.S. election win and the Federal Reserve’s interest rate cuts.

Bitcoin Sets New Record: Where is the Demand Coming From? = The Bit Journal

Bitcoin Soars Past $82,000

Currently valued at $1.16 trillion, Bitcoin ranks as the ninth-largest financial asset. The cryptocurrency saw a 17% increase in the year’s second-best week, trailing only the 22% rise recorded in early March. To gauge Bitcoin’s further potential, it’s essential to understand who’s buying BTC and whether this is a spot-driven or leveraged rally.Bitcoin Sets New Record: Where is the Demand Coming From? = The Bit Journal

Analyzing Spot Demand: Coinbase’s Role

Glassnode’s “Cumulative Volume Delta” (CVD), which measures net buying and selling volume, highlights demand primarily coming from Coinbase, a platform favored by U.S. institutions and retail investors. An increase in the Coinbase Premium Index further supports this trend.

 

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Historically, peaks in Coinbase’s CVD often align with Bitcoin’s local highs and lows. When Bitcoin reached over $73,000 in March, one of the highest CVD levels was recorded, similar to periods surrounding the Luna and FTX collapses in 2022. These trends suggest “smart money” buys near bottoms while others buy near peaks.Bitcoin Sets New Record: Where is the Demand Coming From? = The Bit Journal

ETF Demand and Market Strategies

With Bitcoin spot ETFs gaining traction, questions arise about whether these inflows signify direct spot buying or are part of basis trading—where investors exploit the difference between spot and futures prices. In this strategy, investors take a long position on an ETF while shorting in the futures market, capturing price discrepancies.Bitcoin Sets New Record: Where is the Demand Coming From? = The Bit Journal

CF Benchmarks’ CEO recently stated that 40% of ETF inflows were linked to basis trading. However, despite record ETF inflows, CME’s open interest has not seen equivalent growth, suggesting a more delta-neutral strategy rather than a purely directional one.

What the Experts Say

Bitcoin analyst Checkmate observed that spot Bitcoin ETF inflows are significantly outpacing CME open interest growth, signaling a return to directional spot buying. According to Glassnode data, Bitcoin reserves on exchanges dropped to a year-low of 2.95 million BTC post-election, with demand from platforms like Coinbase, Binance, and Bitfinex driving this trend. Lower exchange balances hint at investor appetite for acquiring more BTC as prices rise.

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Disclaimer

The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.

You should conduct your own research and consult with a qualified financial advisor before making any investment decisions. The Bit Journal does not guarantee the accuracy, completeness, or reliability of any information provided in the price predictions, and we will not be held liable for any losses incurred as a result of relying on this information.

Investing in cryptocurrencies carries risks, including the risk of significant losses. Always invest responsibly and within your means.

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Financial Writer Hello, my name is Carmen Brooke Martin and I am an expert finance journalist with a master's degree from New York University in Business and Economics. I'm passionate about helping startups spread the word, discover and promote great projects in the crypto and fintech industry.What I am working on is to provide basic cryptocurrency education and benefits to the crypto community through video tutorials and written content.As a business developer, I help crypto projects structure and create a whitepaper that can stir investors' interest, advice on marketing strategies and promotions.
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