Bitcoin’s disappointing fundamentals have sparked growing worry among the community.
Some have noted that the cryptocurrency’s on-chain volume is nowhere near its 2021 high. However, Changpeng Zhao, the former CEO of cryptocurrency exchange Binance, believes that the decreasing fundamentals are due to Bitcoin’s emergence as a reserve asset.
Many investors are now gaining exposure to Bitcoin through the very popular Bitcoin exchange-traded funds (ETFs).
“Due to high fees and long block delays, I believe Bitcoin has become more of a reserve asset than a transaction currency. A large portion of the new money is going into ETFs, which do not show up in on-chain TX,” CZ responded.
Chris Kuiper, director of research at Fidelity’s crypto business, recently made a similar point. According to U.Today, Kuiper emphasised that the dominance of Bitcoin ETFs is the primary cause of the nearly empty mempool. Thus, poor on-chain performance does not rule out the possibility of another bull run.
Some analysts now anticipate Bitcoin to make a significant move shortly, as its volatility fell to its lowest point since the fourth quarter of 2023. Bitcoin is presently trading at $97,190, according to CoinGecko statistics.
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