The Bitcoin market has entered a period of notable price consolidation, even as institutional demand continues to surge. According to Tom Lee, Chief Investment Officer at Fundstrat and newly appointed chairman of BitMine, the recent stagnation in Bitcoin’s price—hovering around $107,000—can be attributed to structural dynamics in how demand is being absorbed, rather than a lack of interest.
Despite Bitcoin briefly dipping to $105,159 earlier in the week, investor appetite remains strong. The broader crypto market has stabilized, and confidence appears intact. But why hasn’t this translated into explosive upward momentum? Lee offered key insights during a recent appearance on CNBC’s ETF Edge, shedding light on the nuanced mechanics behind the scenes.
Record Institutional Inflows Without Price Impact
One of the most compelling developments in 2025 has been the extraordinary success of U.S.-listed Bitcoin spot exchange-traded funds (ETFs). Since their debut, these financial products have drawn a staggering **$48.6 billion** in total inflows. At their peak momentum, they recorded 15 consecutive days of net inflows—only interrupted by a single-day outflow of $342 million on July 1.
Today, Bitcoin ETFs collectively manage approximately $131 billion in net assets, representing roughly 6% of Bitcoin’s total market capitalization. This level of institutional adoption is unprecedented and signals deepening mainstream acceptance.
👉 Discover how institutional capital is reshaping digital asset markets.
Yet, despite this flood of institutional capital, Bitcoin’s price has failed to break out decisively beyond its all-time highs. Tom Lee explains that the nature of these inflows plays a critical role in understanding the price standstill.
The "Wash Trade" Effect in ETF Inflows
Not all ETF inflows are created equal. Lee emphasizes that a significant portion of recent inflows may stem from in-kind transfers—where investors deposit existing Bitcoin holdings directly into ETF issuers’ wallets instead of purchasing new BTC on the open market.
This process works as follows:
- An investor who already owns Bitcoin transfers their coins from a cold wallet to an ETF provider.
- In return, they receive shares in the ETF.
- No new market buy order is executed.
Because no fresh capital enters the open market, there’s no immediate upward pressure on price. Lee refers to this as a “wash” transaction—value is exchanged, but liquidity and demand dynamics remain unchanged.
“Just because money flows into ETFs doesn’t mean new demand is being created,” Lee stated. “If it’s in-kind, it’s not moving the needle.”
This distinction is crucial for investors expecting automatic price appreciation from ETF inflows. While asset accumulation by ETFs strengthens long-term fundamentals, short-term price action depends on whether those inflows translate into actual buying pressure.
Retail Profit-Taking Offsets Institutional Buying
Another major factor contributing to price stagnation is sustained selling pressure from early retail adopters—often referred to as “Bitcoin OGs.” These individuals acquired BTC at extremely low prices during previous cycles and are now realizing substantial profits as the price approaches six figures.
Lee noted that many of these long-term holders are indifferent to Bitcoin’s future potential. Their focus is on locking in gains.
“They don’t care if Bitcoin goes to a million; they are probably sellers at around a hundred thousand,” Lee said.
This profit-taking creates a counterbalance to institutional buying. For every dollar institutions pour in through ETFs, some portion is offset by retail investors cashing out. The result? A price equilibrium—a range-bound market where upward momentum is neutralized by downward selling pressure.
Interestingly, Hunter Horsley, CEO of Bitwise, echoed similar sentiments. He suggested that this resistance around $100,000 may persist until Bitcoin breaks into the **$130,000–$150,000** range. At that point, he believes even profit-takers will hesitate to sell, potentially triggering a supply squeeze and accelerating price discovery.
What’s Next for Bitcoin?
Despite current stagnation, the long-term outlook remains bullish. With ETFs continuing to accumulate BTC and global macro trends favoring hard assets, many analysts project significantly higher targets.
- Bernstein Research recently reaffirmed its $200,000 Bitcoin price forecast for late 2025, calling it a “conservative” estimate.
- Other models suggest a potential $1 million valuation by the end of the current cycle, driven by halving dynamics, increased adoption, and limited supply.
The key takeaway is that price consolidation does not equate to weakness. Instead, it reflects a transitional phase where legacy holders exit and institutions build positions—laying the foundation for future growth.
👉 Explore tools that help track real-time institutional Bitcoin accumulation.
Frequently Asked Questions (FAQ)
Q: Why isn’t Bitcoin rising if ETFs are seeing massive inflows?
A: Not all ETF inflows involve new purchases. If investors deposit existing Bitcoin (in-kind transfers), no new market demand is created—limiting immediate price impact.
Q: Are retail investors still influential in Bitcoin’s price movement?
A: Yes. Long-term holders selling profits can offset institutional buying, especially near psychological price levels like $100,000.
Q: Will Bitcoin break past $130,000?
A: Many analysts believe so. Once early sellers exit and confidence grows, reduced supply and stronger demand could push prices higher.
Q: What triggers the next major rally in Bitcoin?
A: A combination of sustained net buying (not just in-kind transfers), reduced retail selling, and macroeconomic tailwinds such as inflation or geopolitical uncertainty.
Q: How much of Bitcoin’s supply is now held by institutions?
A: U.S. spot Bitcoin ETFs alone hold assets worth about 6% of Bitcoin’s total market cap—equivalent to over 900,000 BTC—and that number is growing steadily.
Final Thoughts
Bitcoin’s current price stagnation is not a sign of fading interest but rather a reflection of complex market dynamics. Institutional demand is real and growing—but its impact is being tempered by structural factors like in-kind ETF deposits and profit-taking from early adopters.
As these forces rebalance, the stage could be set for a powerful breakout. Investors should focus not just on price charts but on on-chain data, ETF flow composition, and market sentiment shifts to anticipate the next leg up.
👉 Stay ahead with advanced analytics and real-time market insights.
Core Keywords: Bitcoin price stagnation, institutional demand Bitcoin, Bitcoin ETF inflows, in-kind transfers Bitcoin, retail profit-taking, Bitcoin price prediction 2025, supply and demand Bitcoin, ETF impact on Bitcoin price