Bitcoin institutional investors have hit pause on their recent buying spree as BTC price action settles into a consolidation phase.
Inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) turned net negative for the first time in two weeks, according to data from various sources, including UK-based investment firm Farside Investors.
The cooling interest in Bitcoin ETFs comes as BTC/USD hovers within 10% of its all-time high.
On Oct. 22, U.S. ETF inflows flipped net negative, with a total outflow of $79.1 million for the day.
This downturn was driven by one product, the ARK 21Shares Bitcoin ETF, which saw outflows of $134 million. In contrast, other ETF products had either inflows or no activity at all, Farside data showed.
BlackRock’s iShares Bitcoin ETF (IBIT), the largest by assets under management, recorded $43 million in inflows — significantly lower than the $329 million from the previous day.
Commentator WhalePanda noted the situation on X, remarking, “Price just going sideways around $67k.”
U.S. spot Bitcoin ETF net flows (screenshot). Source: Farside Investors
The last time U.S. ETFs experienced net negative flows was on Oct. 10, when $81.1 million was withdrawn.
Over the past month, ETFs have been a major focal point in the crypto markets.
As Cointelegraph reported, institutional ownership through ETFs now accounts for about 20% of the market, as per data shared on Oct. 18 by Ki Young Ju, co-founder of on-chain analytics platform CryptoQuant.
Ki added, “Thanks to spot ETFs, 1,179 institutions have joined Bitcoin’s cap table this year.”
European investors have also shown interest, allocating more than $100 million to U.S. ETF products year-to-date.
Last week, net inflows for U.S.-based Bitcoin ETFs surpassed $20 billion for the first time, with total assets under management reaching a record $65 billion.
In a joint research report with Coinbase, on-chain analytics firm Glassnode called the surge in ETF interest “one of the biggest stories in the market.”
The report highlighted that in Q3, U.S. Bitcoin ETFs saw over $5 billion in net inflows, reflecting robust demand for direct exposure to Bitcoin from institutional investors.
“These ETFs have become key drivers of liquidity and accessibility, making it easier for a broader range of market participants to gain exposure to Bitcoin without the complexities of direct ownership,” Glassnode noted.
A European Central Bank (ECB) paper published earlier this month, which stopped just short of labeling Bitcoin a Ponzi scheme, has faced strong backlash from a group of crypto academics.
The paper criticized Bitcoin’s volatility, limited productive contribution, and wealth concentration, calling them significant flaws, according to Murray Rudd of the Bitcoin advocacy organization Satoshi Action Fund.
In a detailed rebuttal released on Oct. 22, the academics critiqued the Oct. 12 ECB working paper authored by Ulrich Bindseil and Jürgen Schaaf, which sparked outrage among cryptocurrency supporters.
The rebuttal argued that “methodological weaknesses and personal or institutional biases” undermined the ECB paper’s credibility and failed to provide a balanced analysis of Bitcoin’s utility or future prospects.
Rudd noted that the ECB’s assessment dismissed Bitcoin’s long-term viability and societal benefits, while promoting central bank digital currencies (CBDCs) as a superior alternative for modern financial systems.
Rudd also claimed that the ECB report misrepresented Bitcoin’s primary purpose by stating it had shifted from a payment method to an investment vehicle. Additionally, he said the authors misunderstood Bitcoin’s technological foundations, particularly in relation to proof-of-work and decentralization.
“By focusing on the early limitations, Bindseil and Schaaf fail to acknowledge the significant progress made in improving its scalability and efficiency,” Rudd added.
The rebuttal highlighted flawed arguments, including claims about wealth concentration, which ignored that many large wallets belong to exchanges managing funds for millions of users.
The ECB’s critique of Bitcoin’s volatility was also deemed shortsighted, as it failed to recognize volatility as a characteristic typical of early-stage technology adoption.
Rudd argued that the paper overlooked Bitcoin’s utility as a store of value and dismissed the broader implications of inflation within traditional financial systems, using the U.S. dollar’s declining purchasing power as an example.
The rebuttal also pointed out a conflict of interest, noting the ECB authors’ involvement in developing a digital euro.
“Given the ECB’s strategic focus on developing a CBDC, it is reasonable to infer that the authors, at best, have a vested interest in portraying Bitcoin as an inferior, speculative asset,” the rebuttal stated.
The academics emphasized Bitcoin’s potential benefits, such as financial inclusion, cross-border payments, and innovations in energy efficiency.
Responding to the criticism, Bindseil noted that the rebuttal seemed to broadly defend Bitcoin rather than address specific points from the October 2024 paper. Schaaf also denied that their paper promoted CBDCs as a superior solution, stating that CBDCs were not even mentioned.
Ethereum co-founder Vitalik Buterin has strongly criticized MicroStrategy founder Michael Saylor’s recent suggestion that crypto users should rely on big banks to custody Bitcoin.
In response to an Oct. 22 post by Casa’s chief security officer Jameson Lopp, who was advocating for self-custody, Buterin said, “I’ll happily say that I think Saylor’s comments are batshit insane.”
This criticism adds to the growing backlash against Saylor, who on Oct. 21 recommended that Bitcoin holders should trust “too big to fail” banks engineered to handle financial assets, a stance that seems to contradict his previous support for self-custody.
Buterin argued that Saylor appeared to be advocating for a form of “regulatory capture” to secure crypto, suggesting that investment firms like BlackRock and Fidelity could hold Bitcoin with backing from lawmakers and law enforcement.
He added, “There’s plenty of precedent for how this strategy can fail, and for me, it’s not what crypto is about.”
During an interview with financial reporter Madison Reidy, Saylor had also criticized “crypto-anarchists,” cautioning that unregulated entities that avoid government oversight, taxes, or reporting requirements could increase the risk of Bitcoin seizure.
The backlash against Saylor’s comments has been mounting.
Lopp emphasized the importance of self-custody for Bitcoin holders and for the strength of the network, stating, “It’s important for the continued strengthening and improvement of the entire network.”
On Oct. 22, ShapeShift founder Erik Voorhees joined the criticism, noting that the ability to withdraw Bitcoin into self-custody acts as a “check that prevents the centralization and corruption inevitable under any other arrangement.”
He further added, “For Saylor to so casually dismiss this fundamental precept is wholly inappropriate and deserves the backlash.”
In an earlier interview with Blockware analyst Joe Burnett, Saylor had argued in favor of centralized custodians for crypto.
This was just three weeks after the collapse of FTX, where users lost their Bitcoin left on the platform, as noted by Blockware in an Oct. 22 post.
Bitcoin retail activity is showing signs of a revival, resembling patterns seen during the run-up to all-time highs earlier this year, according to new data.
In an Oct. 21 Quicktake blog post, onchain analytics platform CryptoQuant reported a 13% increase in transactions valued at under $1,000, indicating growing retail investor activity.
Bitcoin retail interest, which had significantly declined following March’s peak for BTC/USD, appears to be gradually returning.
Despite limited mainstream attention outside of institutional circles, as reflected by metrics such as Google search trends, transaction volume figures suggest a shift may be underway.
“In the last 30 days, retail demand grew by about 13%, highlighting a scenario that was only seen in March, when we were close to the last historical high,” noted CryptoQuant contributor Cauê Oliveira.
He added, “Note that in the last 4 months we have seen a decrease in the activity of these small investors, while whales maintained a high amount of transactions and absorption of coins.”
Bitcoin retail investor volume. Source: CryptoQuant
Data from Cointelegraph Markets Pro and TradingView reveals that BTC/USD climbed nearly 10% over the 30 days leading up to Oct. 20, while transaction volumes for amounts under $1,000 rose by 13% during the same period.
The trend resembles the weeks leading up to the March peak, according to Oliveira, who stated, “This recent rise in Bitcoin is causing small investors to return to trading, signaling the beginning of a pattern of lower risk aversion.”
Risk aversion remains a central theme for many market watchers.
Global liquidity trends are fueling a broader appetite for risk, with expectations that the trend will strengthen through the U.S. presidential election and beyond.
“Both BTC and ETH have yet to clear July highs but are closing in on key 70k and 2800 resistance levels,” QCP Capital wrote in its Oct. 22 bulletin to Telegram subscribers.
“A break above these levels is likely to attract massive retail attention. With the US elections just 15 days away and equities looking strong, the market is definitely optimistic as Risk Reversals have flipped in favour of Calls across all tenors.”
However, U.S. retail interest in Bitcoin remains muted.
CryptoQuant’s data indicates that the Coinbase premium — the pricing difference between Bitcoin on Coinbase and Binance — is barely positive, even as BTC approaches its highest weekly close since early June.
Crypto has emerged as a key issue in the 2024 U.S. presidential election, with many in the industry supporting former President and Republican nominee Donald Trump due to his pro-crypto policy stance, which is seen as a potential driver for growth in the sector.
As opinion polls suggest a close race, some crypto traders, like Satoshi Flipper, argue that the potential impact of a Trump victory has not yet been fully priced into the market.
Satoshi Flipper believes that if Republicans win, it would strengthen the ongoing bull market for Bitcoin and altcoins.
Prediction markets like Kalshi and Polymarket have also shown growing support for Trump, with his victory probability rising to around 60%, sparking concerns about possible manipulation, though proponents of prediction markets, such as Kalshi founder Tarek Mansour, dispute this notion.
Teen Bitcoin millionaire Erik Finman expressed optimism about a Trump victory, telling Cointelegraph that it would create a pro-crypto environment in the U.S. and attract significant investment in the crypto markets.
Finman stated, “His policies will ignite the crypto market, fueling massive growth across the board,” and predicted that “if Trump wins, I believe Bitcoin could hit $100,000 during his second term.”
Pseudonymous analyst Crypto Rand added, “The most bullish aspect of the Trump administration is simply his non-hostile stance toward cryptocurrencies. This attitude alone is a game-changer.”
However, not everyone shares this optimism.
Businessman Mark Cuban, who supports Democratic nominee Vice President Kamala Harris, argued that even if crypto markets initially “pump for a few weeks” following a Trump win, his economic policies could ultimately be inflationary and hinder Bitcoin’s price performance.
Trump has promised several pro-crypto policies, including firing SEC Chair Gary Gensler “on day one.”
While experts say he may not be able to do this directly, he could demote Gensler and nominate a new, more crypto-friendly candidate, subject to Senate approval.
Basel Ismail, CEO of Blockcircle, believes a new SEC chair supportive of crypto would boost Bitcoin adoption and pave the way for altcoin resurgence.
With several altcoin ETFs, including XRP and Solana, awaiting approval, Bloomberg analyst Eric Balchunas suggested that a Trump-appointed SEC commissioner might expedite the process.
Trump’s ambitious pro-crypto vision includes making the U.S. the “world capital of crypto” and establishing a crypto advisory council, which Crypto Rand sees as a highly significant yet overlooked commitment.
MicroStrategy’s executive chairman, Michael Saylor, faced backlash over recent comments suggesting that Bitcoin custodianship is better handled by “too big to fail” financial institutions rather than through self-custody, a practice he previously endorsed.
In an Oct. 21 interview with financial reporter Madison Reidy, Saylor controversially argued that Bitcoin holders “have nothing to lose” by transferring their assets to institutions.
This view seemed to contradict Saylor’s earlier advocacy for self-custody, making it a contentious point within the crypto community.
When asked about the possibility of the U.S. government stripping Bitcoin holders of self-custody rights, similar to how private gold ownership was made illegal in 1933, Saylor dismissed the concern, labeling those who fear state-sanctioned seizure as “paranoid crypto-anarchists.”
He added, “It’s a myth and a trope that goes on over and over again,” and emphasized that “there’s just a lot of fear that’s unnecessary.”
Saylor suggested that instead of using hardware wallets, Bitcoin holders should rely on major banks that are “engineered to be custodians of financial assets.”
His stance sparked criticism from Bitcoin advocates.
“Saylor is on a mission to relegate Bitcoin into an investment pet rock and halt its usage as a currency,” said “Sina,” founder of Bitcoin custody firm 21st Capital.
Simon Dixon, author of “Bank to the Future,” speculated that Saylor’s shift in position could be tied to MicroStrategy’s long-term plan to become a Bitcoin bank offering collateralized loans.
“Bitcoin anarchists: keep helping people gain freedom from banks, governments & central banks,” Dixon urged.
John Carvalho, CEO of Bitcoin payments firm Synonym, also criticized Saylor’s change in tone, pointing out that Saylor used to claim “Bitcoin is hope” for everyone.
He questioned what Saylor meant by that statement if he now dismissed “paranoid crypto-anarchists” as having ulterior motives.
Following the FTX collapse in November 2022, Saylor had advocated for Bitcoin self-custody, arguing that it prevented powerful custodians from corrupting the network: “In systems where there is no self-custody, the custodians accumulate too much power and then they can abuse that power.”
He even encouraged people to remember their 12-word seed phrase and to “tell people to ‘f*** themselves’ if they come for you.”
Open interest (OI) in Bitcoin derivatives hit a record high on Oct. 21, as Bitcoin’s price approached the $70,000 level. CoinGlass reported that the open interest on Bitcoin futures reached $40.5 billion, indicating a surge in activity for BTC derivatives.
Open interest represents the value or number of outstanding futures contracts that have not yet expired. It reflects the amount of capital invested in Bitcoin derivatives, with higher OI often signaling increased leverage and potential volatility in the market.
The Chicago Mercantile Exchange (CME) held the largest share of open interest, accounting for 30.7%, followed by Binance with 20.4% and Bybit at 15%.
Periods of high open interest can lead to significant market swings. If prices change rapidly, it may trigger cascading liquidations, resulting in forced selling and sharp price drops, commonly known as “flush outs.” The last major flush-out occurred in early August when Bitcoin’s price plummeted nearly 20%, or about $12,000, within two days, falling below $50,000.
On Oct. 21, Bitcoin reached a high of $69,380, according to TradingView data, but was rejected at this resistance level, pulling back to $69,033 at the time of publication. CoinGecko data indicates that Bitcoin is currently 6.4% below its all-time high of $73,738.
Cointelegraph reported on Oct. 20 that if Bitcoin surpasses the $70,000 mark, it could boost the performance of altcoins like Ether (ETH) and Solana (SOL). Both assets have been outperforming Bitcoin in daily gains, with Ether climbing 3.5% to exceed $2,750, while Solana gained 6%, reaching nearly $170 in early trading on Oct. 21. However, both assets experienced slight pullbacks since then.
The record-setting open interest highlights growing market activity and suggests that traders are positioning for potential significant moves in Bitcoin’s price.
Bitcoin is poised to “regain the spotlight” as its price movements catch up with U.S. equities, according to new analysis. In an Oct. 19 blog post, Caleb Franzen, founder of Cubic Analytics, highlighted the potential for a significant Bitcoin price breakout.
Bitcoin needs to recover in order to align with the recent performance of U.S. stocks, as the S&P 500 continues to hit new all-time highs. Franzen analyzed BTC/USD relative to the Invesco S&P 500 Equal Weight ETF (RSP), noting that Bitcoin has not reached new highs against RSP since 2021 and has been consolidating within a regression channel.
“On a relative basis, Bitcoin failed to produce new ATH’s vs. the equal-weight S&P 500,” Franzen wrote, pointing out that BTC/RSP is now starting to break above the regression channel. He suggested traders might consider a strategy of going short on RSP while going long on Bitcoin.
“Based on this structure, the ongoing breakout implies a return back to the blue zone,” he added, identifying this area as potential resistance but also a price target.
Franzen’s optimism was supported by the Williams%R Oscillator, a trend strength indicator. The 120-day version of this tool suggests further upside, having rebounded from macro lows in the oversold zone back in July. He noted that similar signals in January 2024 and October 2023 resulted in BTC/USD gains of 48% and 123%, respectively, over the next three months.
“With Bitcoin currently trading at its highest prices since July 2024, investors are regaining confidence in the potential for continued upside, particularly with stocks at all-time highs,” Franzen explained.
As Bitcoin hovers near $69,000, attention is focused on whether it can break above its final resistance level, which has held since March. The first daily closes above the descending channel since then have fueled a bullish outlook.
Popular analyst Rekt Capital emphasized the importance of recent price moves, noting, “History has been made as Bitcoin has registered its first Daily Candle Close above the red resistance area.” He added that maintaining support above $66,400 could ensure a bullish weekly close for BTC.
A recent paper by the Federal Reserve Bank of Minneapolis suggests that assets like Bitcoin may need to be taxed or banned for governments to sustain ongoing budget deficits. The study, published on Oct. 17, argues that Bitcoin creates challenges for policy implementation in economies where governments rely on permanent deficits funded by nominal debt.
The report describes Bitcoin as contributing to a “balanced budget trap,” a situation where the government is forced to balance its budget. The researchers used Bitcoin as an example of a fixed-supply private asset that lacks real resource claims. To resolve this issue, they proposed banning or taxing Bitcoin, stating, “A legal prohibition against Bitcoin can restore unique implementation of permanent primary deficits, and so can a tax on Bitcoin.”
A primary deficit occurs when a government’s spending exceeds its revenue, excluding interest payments on debt. The term “permanent” implies that the government plans to continue spending more than it collects indefinitely. Currently, the U.S. national debt stands at $35.7 trillion, with the primary deficit— the annual gap between spending and revenue— around $1.8 trillion. Reuters reported on Oct. 19 that a 29% increase in interest costs for Treasury debt was the main contributor to this year’s deficit, the largest outside of the COVID-19 period.
Commenting on the paper, Matthew Sigel, head of digital asset research at VanEck, noted on Oct. 21 that the Minneapolis Fed has joined the European Central Bank in targeting Bitcoin, suggesting that the Fed “fantasizes about ‘legal prohibition’ and extra taxes on BTC to ensure govt debt remains the ‘only risk-free security.’”
Messari co-founder Dan McArdle highlighted a 1996 Minneapolis Fed paper titled “Money is Memory,” which interestingly made arguments aligned with Bitcoin’s characteristics, defining money as an object that does not “enter production,” has a “fixed supply,” and functions as a form of memory.
The European Central Bank (ECB) has also recently scrutinized Bitcoin. On Oct. 12, the ECB released a paper alleging that older Bitcoin holders profit at the expense of newer ones and suggested regulating or banning Bitcoin to prevent its price from rising. ECB adviser Jürgen Schaaf echoed these sentiments on Oct. 20, advocating for policies to curb Bitcoin’s growth or eliminate it entirely.
On Oct. 19, Bitcoin (BTC) hovered near a crucial breakout level after a “FOMO liquidity grab” saw it rejected at $69,000.
Data from Cointelegraph Markets Pro and TradingView indicated that BTC’s price action tightened following the last Wall Street trading session of the week.
On the previous day, BTC/USD reached new three-month highs, nearly touching $69,000 on Bitstamp before losing its sudden gains.
“Low volume + bear divs on this breakout,” popular trader Roman commented on X, adding, “Still think we come back down and consolidate before moving higher. This seems like a fomo liquidity grab before the real breakout.”
Data from CoinGlass showed thick liquidity barriers forming around the spot price, with significant sell orders capping Bitcoin’s upward movement.
Roman highlighted a key area of interest at $68,400, describing it as a breakout zone of significant importance since the March all-time high. “Everyone is watching 68.4k to break the macro range,” he stated.
Fellow trader and analyst Rekt Capital noted that while Bitcoin was attempting to push past the top of the resistance area, bulls needed to establish the zone above $68,000 as solid support.
“Bitcoin is once again pressing beyond the very top of the resistance area (red),” Rekt Capital explained, adding, “Bitcoin just needs one Daily Close beyond the red resistance to position itself for a confirmed breakout from here. Daily Close is essential to confirm lack of upside wicks beyond resistance.”
The Oct. 18 daily close finished slightly above $68,400, marking Bitcoin’s highest closing price since June 10.
Looking ahead, trading firm QCP Capital pointed to favorable macroeconomic trends for Bitcoin bulls, indicating positive momentum could continue.