BlockBeats News, November 24th, according to a report by Cointelegraph, NYDIG’s Head of Research Greg Cipolaro stated in his latest report that the inflow of cryptocurrency ETF funds and Demand and Time Deposits (DAT) had previously driven Bitcoin to a new all-time high but is now causing its price to decline. He pointed out that a liquidity event in early October triggered a reversal in ETF fund flows, a sharp drop in DAT premium, and a decline in stablecoin supply, indicating that funds are flowing out of the system. The spot Bitcoin ETF was once the most prominent success story of this cycle, but has now become a hindrance to Bitcoin’s development. However, factors such as global liquidity and macro news continue to impact Bitcoin. During cyclical pullbacks, Bitcoin’s dominance tends to rise as funds flow back into the most mature asset. Currently, Bitcoin’s dominance has fallen from over 60% in early November to around 58%.
DAT and stablecoins were once important sources of Bitcoin demand. However, as DAT premium compresses and stablecoin supply declines, investors seem to be withdrawing liquidity. Cipolaro believes that even as the market downturn deepens, the DAT sector still has cushioning room, and there are currently no signs of financial distress. Despite the recent pullback, Cipolaro remains bullish on Bitcoin’s long-term outlook, believing that it is gaining institutional favor, sovereign interest is growing, and its role is becoming more established. However, he warns that the cyclical narrative is becoming evident, and investors should be prepared for the worst as the road ahead may be bumpy.
