Bitcoin's closing price in June has historically broken through $104,000! Institutional undercurrents are surging, why have traditional on-chain indicators "failed"?

Bitcoin's closing price in June has historically broken through $104,000! Behind the strong ETF inflow, why have traditional on-chain indicators "failed"? Institutional undercurrents have become a key driving force.

June Closing Price hits an all-time high, Q2 performance is the strongest ever

Bitcoin closed in June at a strong price of over $104,000, not only setting its highest monthly Closing Price in history but also recording the strongest second quarter performance on record.

Strong ETF capital inflow vs. weak on-chain demand: the market is currently experiencing a "disconnection" phenomenon However, behind this impressive performance lies a contradiction. Despite the strong inflow data of the U.S. spot Bitcoin exchange-traded fund (ETF) in June (according to SoSoValue data, there was a net inflow of nearly $4 billion for 12 consecutive days, with around $550 million flowing in on June 25 alone), traditional on-chain metrics suggest that buyer demand is relatively weak.

Experts pointed out to Decrypt that this kind of "disconnection" phenomenon stems from the fundamental differences in the way institutional investors and retail investors purchase Bitcoin. Institutional Investors often conduct large-scale purchases "out of sight."

Institutional operations are discreet, and on-chain data is hard to trace Aslan Tashtanov, a core contributor to Mysten Labs DeepBook and blockchain engineer, explained that institutional players "tend to make purchases on centralized exchanges (CEX) and through over-the-counter (OTC Desks)," which are channels specifically designed to handle large transactions and avoid market impact. Such transactions are often structured to evade public visibility, occurring either off-chain or ultimately flowing into cold wallets with extremely low liquidity (Cold Wallets).

"There are multiple reasons why on-chain data metrics cannot fully reflect the complete picture of institutional investor behavior," Tashtanov said. The result is a unique market dynamic: Institutional Capital can drive prices but does not trigger conventional on-chain signals.

Traditional on-chain indicators signal: retail neutral, miner/institution OTC balances plummet Despite recent price fluctuations and a gradual upward trend over the past few weeks, Bitcoin Spot Retail Trading Activity is currently still in a neutral state.

At the same time, according to data from CryptoQuant, the known over-the-counter (OTC) addresses holding Bitcoin have dropped to a historical low. Since January, the average balance related to miners has decreased by 18%, to about 156,000 BTC. Miners, due to their large holdings of Bitcoin and their ability to influence market trends, are often considered market participants of equal importance to institutions.

The decline in OTC balances (especially those related to miners) signifies a shift in the flow and method of large Bitcoin transactions. However, this only reveals part of the truth.

Institutional demand shifts to new channels, ETF/ETP becomes a key vehicle "Large-scale institutional buying activity will not be reflected in regular on-chain metrics," said Kony Kwong, CEO and co-founder of GAIB, to Decrypt. "This disconnect makes demand appear weaker, even though funds are continuously flowing in through Institutional Vehicles, such as the Bitcoin Spot ETF in the U.S. or the Crypto Asset ETP in Europe." GAIB focuses on building financial infrastructure for the AI computing economy, claiming to closely monitor institutional activity by tokenizing GPUs into yield-generating digital assets.

Halving effect not meeting expectations? A new normal under supply constraints Kwong added: "In the environment after the Bitcoin Halving, new supply is limited, and even moderate institutional demand can drive the market." The Bitcoin halving event in April 2024 (which halves the miners' block rewards as part of Bitcoin's four-year issuance cycle) did not immediately lead to a significant price increase.

A year later, Bitcoin even recorded the weakest post-halving performance on record. Influenced by Trump's tariff policies threatening market stability and stirring risk assets, Bitcoin briefly fell to $75,000 in early April. Data from institutional market intelligence firm Kaiko Research shows that the lower and more stable range fluctuating between $80,000 and $90,000 marks a stark contrast to the explosive rally seen after previous halvings.

Liquidity gaps are highlighted, Layer 1 networks are competing to build Bitcoin DeFi bridges However, despite the limited supply, historical trends indicate that market reactions are often gradual and significantly varied. For institutions, the issue is not only about timing but also concerns infrastructure.

Tashtanov pointed out the existence of an infrastructure gap, which has prompted other networks to intervene, citing blockchains like Sui that have already established a foothold in the Bitcoin decentralized finance (DeFi) space. He stated that Sui "has played a positive role in supporting institutions to acquire Bitcoin DeFi strategies," and added that Bitcoin "now accounts for over 10% of Sui's total locked value (TVL)."

"The main reason is actually very practical," Tashtanov emphasized, "there is simply not enough on-chain liquidity to meet institutional demand."

Bitcoin Real-time Price Update As of the time of writing, according to Gate data, Bitcoin once rose to $107,190.2, currently reported at $106,951.8, almost wiping out the decline over the past 24 hours.