Tag: particularly interesting metric

How ETF Flows Became the New Driving Force for Bitcoin

The post How ETF Flows Became the New Driving Force for Bitcoin appeared com. Institutional Bitcoin flows through ETFs now dominate price movements, with normalized data offering consistent insights into market sentiment and positioning. EFIS reveals how sustained ETF inflows or outflows forecast accumulation or distribution phases among large institutional investors. Since early 2024, capital flows from spot Bitcoin ETFs in the United States have taken over the market. This isn’t just a new story in the crypto industry, but a reality that’s increasingly difficult to ignore. Observing this trend, on-chain analyst Crazzyblockk on CryptoQuant highlighted a particularly interesting metric: the ETF Flow Impact Score (EFIS). This model is designed to measure the extent to which institutional funds from ETFs can move the Bitcoin price, with surprisingly high accuracy. However, Crazzyblockk doesn’t simply count dollar inflows and outflows. He realized one crucial thing: a $200 million investment might have had a significant impact earlier in the year when AUM was still small, but now its impact is much smaller. Therefore, the EFIS normalizes fund flows based on total assets under management (AUM), creating a consistent measure over time. This is where an interesting correlation arises: if fund flows exceed 1% of daily AUM, Bitcoin can move up 2% to 3% within a week. EFIS Model Points to $88K, But Market Seems Unconvinced Now, let’s look at some more alarming numbers. Total ETF holdings currently stand at 1, 047, 000 BTC. Based on current inflow patterns, EFIS estimates Bitcoin’s fair price should be around $88, 000. But the reality? It’s still far above that. This gap raises an intriguing question: is the market still unaware, or are ETFs simply being too aggressive? Not only that, EFIS also has another feature that makes investors more alert.