16 Jul
16Jul

Bitcoin ($BTC) demonstrated its strong appeal to institutional investors this week as its price briefly dipped below $116,000 on Tuesday, only to be met with a significant rush of large-volume buying. Data from on-chain analytics firm Glassnode reveals a changing dynamic in how institutions react to sudden Bitcoin price movements.

While BTC/USD retraced some of its recent gains, inflows into US spot Bitcoin exchange-traded funds (ETFs) remained notably high. Glassnode reported on X, "Monday saw one of the largest daily inflows to US spot Bitcoin ETFs in the past 3 months (+7.5K $BTC)." They added a crucial observation about Tuesday's market action: "But what stands out is Tuesday’s response: institutions didn’t flinch - they doubled down, adding another +3.4K $BTC. Outflows remained near zero across the board."

This behavior stands in stark contrast to earlier in 2025 and last year, when similar price corrections often led to instant and substantial ETF outflows. For instance, in late February, when BTC/USD dropped from nearly $100,000 to multi-month lows of $75,000, net outflows from ETFs reportedly topped $3.2 billion over eight trading days, including a record single-day net outflow of over $1.1 billion, according to data from UK investment firm Farside Investors.


ETFs Fuel Optimism for Bitcoin's Price Trajectory

The sustained institutional demand is fueling renewed optimism about the impact of ETFs on Bitcoin's price strength. Network economist Timothy Peterson highlighted this dynamic in a recent X thread, calculating that "US Bitcoin ETFs are buying Bitcoin faster than the protocol can produce it."

Peterson explained, "Bitcoin's digital scarcity limits supply production to a fixed amount, which is halved every 4 years. A net -343,000 Bitcoin deficit has resulted from US Bitcoin ETF acquisitions, representing about $40 billion in today's value."

Based on these trends, Peterson forecasts that if steady demand continues and there are no significant increases in supply (e.g., from miners or existing holders), BTC/USD could see an additional rise of $18,000 by the end of the year. He concluded, "Over 6 months, this could push the price to ~$130,000–$135,000, barring major market shifts," while acknowledging this is a "simplified projection."

The steadfast institutional buying during a price dip suggests a growing maturity in the institutional approach to Bitcoin, treating corrections as accumulation opportunities rather than signals for exit. This shift in behavior could have profound implications for Bitcoin's price stability and long-term growth trajectory.

July 2025, Cryptoniteuae

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