by Coinstrooper Crypto Articles
Quick Take
  • Bitcoin is struggling around $80,000 as ETF demand swings and rising oil prices complicate the outlook for interest rates.
  • Yet BloFin CEO Matt Hu believes the cryptocurrency’s future crashes could become less severe.
  • The latest market turmoil is putting those arguments to the test.
  • According to Hu, ETFs and corporate treasuries have brought in investors with longer investment horizons, potentially reducing panic selling during downturns.

What Happened

Speaking to BeInCrypto at TOKEN2049 in Singapore earlier this month, Hu explained how traditional investors are changing Bitcoin, what could drive its next rally, and why altcoins may be left behind.

According to Hu, ETFs and corporate treasuries have brought in investors with longer investment horizons, potentially reducing panic selling during downturns.

Meanwhile, Glassnode estimates that ETF investors and Bitcoin treasury companies have average acquisition costs near $81,500 and $80,200, respectively.

For investors, this distinction matters. Daily ETF outflows can move prices, but a sustained reduction in Bitcoin holdings would offer stronger evidence that long-term capital is leaving.

Even inflation-protected 10-year US government bonds were yielding around 2.6%. That makes Bitcoin, which generates no income, less attractive to investors seeking predictable returns.

Market Context

Bitcoin is struggling around $80,000 as ETF demand swings and rising oil prices complicate the outlook for interest rates. Yet BloFin CEO Matt Hu believes the cryptocurrency’s future crashes could become less severe.

The latest market turmoil is putting those arguments to the test.

“Despite headlines about daily ETF inflows and outflows, the total amount of Bitcoin held by these funds, measured in BTC, remained broadly stable through the bear market,” the BloFin CEO explained.

The research also found that Bitcoin’s latest bear-market decline reached 53%, compared with crashes of approximately 77%–85% in previous cycles. However, that comparison assumes June remains the market bottom.

“Higher bond yields currently make bonds attractive and draw capital away from Bitcoin.”

Why It Matters

Hu identified specific conditions that would undermine BloFin’s outlook.

Glassnode identifies 85,000–87,500 as an important resistance area. Analysts warn that losing the 80,000–82,000 support zone could expose Bitcoin to a deeper decline toward 73,000–75,000.

What Could Drive Bitcoin’s Next Sustained Rally?

Government debt could eventually become a powerful catalyst for Bitcoin, according to Hu. However, current financial conditions are working against that possibility.

However, Hu believes rising government debt could eventually change that relationship.

Details

Are Bitcoin’s Boom-and-Bust Cycles Becoming Less Severe?

“The biggest change is Bitcoin’s ownership base.”

BloFin’s Research estimated that US spot ETFs held roughly 1.3 million BTC, broadly unchanged since January.

The theory now faces a difficult test.

Bitcoin slipped below $80,000 over the weekend. US spot Bitcoin ETFs recorded $635.6 million in net outflows on October 22, following three sessions that attracted more than $1 billion.

Sustained weakness below those levels would put both groups at a loss on average, potentially testing their willingness to hold.

“A sustained decline in ETF Bitcoin holdings, widespread forced selling by Bitcoin treasury companies, and a shrinking long-term holder base, as measured by on-chain metrics, would invalidate our current view.”

The US 10-year Treasury yield ended October 23 near 5%, while Brent crude climbed above $116 a barrel.

Higher energy costs threaten to keep inflation elevated, limiting the Federal Reserve’s room to ease monetary policy.