The Real Forces Moving Bitcoin Now | Marc Arjoon
Episode
33 min
Read time
2 min
Topics
Health & Wellness, Investing, Sales & Revenue
AI-Generated Summary
Key Takeaways
- ✓ETF Investor Segmentation: Bitcoin's ETF investor base splits into three distinct groups: hedge funds running basis trades, attention-driven speculators chasing asymmetric bets, and long-term allocators like pension funds. Only the third group is currently net buying, creating a structural price floor but insufficient momentum for a sharp V-shaped recovery in the near term.
- ✓Basis Trade Collapse: CME futures open interest has declined 20–29% every month since October, signaling hedge funds unwinding carry trade positions. The spread between spot and futures compressed from double-digit yields to low single digits, matching T-bill rates, making the trade unattractive. Monitoring CME open interest monthly indicates whether this institutional demand source can return.
- ✓Miner Economics Signal: Bitcoin miners are currently operating at a loss, with hash rate still climbing quarterly while price lags and network transaction fees sit at six-month lows. Miners holding roughly 10% of total supply are under pressure to sell. A hash rate decline would actually relieve selling pressure, making it a constructive signal rather than a bearish one.
- ✓AI Pivot as Supply Pressure: Major publicly traded miners like Iron are selling Bitcoin holdings to fund gigawatt-scale AI data center buildouts, capitalizing on a structural data center shortage. This creates consistent BTC selling pressure from miners. Tracking which miners are pivoting to AI versus accumulating Bitcoin as treasury assets reveals which entities are contributing to near-term supply overhang.
- ✓Institutional Blockchain as Bitcoin Gateway: Corporate adoption of permissioned or semi-public blockchains, such as JPMorgan migrating from its private Quorum network to Base, functions as an entry point into the broader crypto ecosystem. Arjoon argues this pattern historically increases institutional comfort with digital assets overall, creating a longer-term tailwind for Bitcoin rather than diverting capital away from it.
What It Covers
Blockworks research analyst Marc Arjoon and host David Kinellis analyze the forces currently driving Bitcoin's price, covering miner economics, three distinct institutional investor types, ETF flow dynamics, the basis trade collapse, and whether Bitcoin's four-year halving cycle retains mechanical relevance in an institutionally dominated market.
Key Questions Answered
- •ETF Investor Segmentation: Bitcoin's ETF investor base splits into three distinct groups: hedge funds running basis trades, attention-driven speculators chasing asymmetric bets, and long-term allocators like pension funds. Only the third group is currently net buying, creating a structural price floor but insufficient momentum for a sharp V-shaped recovery in the near term.
- •Basis Trade Collapse: CME futures open interest has declined 20–29% every month since October, signaling hedge funds unwinding carry trade positions. The spread between spot and futures compressed from double-digit yields to low single digits, matching T-bill rates, making the trade unattractive. Monitoring CME open interest monthly indicates whether this institutional demand source can return.
- •Miner Economics Signal: Bitcoin miners are currently operating at a loss, with hash rate still climbing quarterly while price lags and network transaction fees sit at six-month lows. Miners holding roughly 10% of total supply are under pressure to sell. A hash rate decline would actually relieve selling pressure, making it a constructive signal rather than a bearish one.
- •AI Pivot as Supply Pressure: Major publicly traded miners like Iron are selling Bitcoin holdings to fund gigawatt-scale AI data center buildouts, capitalizing on a structural data center shortage. This creates consistent BTC selling pressure from miners. Tracking which miners are pivoting to AI versus accumulating Bitcoin as treasury assets reveals which entities are contributing to near-term supply overhang.
- •Institutional Blockchain as Bitcoin Gateway: Corporate adoption of permissioned or semi-public blockchains, such as JPMorgan migrating from its private Quorum network to Base, functions as an entry point into the broader crypto ecosystem. Arjoon argues this pattern historically increases institutional comfort with digital assets overall, creating a longer-term tailwind for Bitcoin rather than diverting capital away from it.
Notable Moment
Arjoon notes that despite Bitcoin ETFs recording four consecutive months of net negative outflows — a historic first — positive inflows are still occurring simultaneously. Long-term allocators including pension funds continue purchasing, separating net flow data from the more nuanced reality of ongoing structural accumulation beneath the surface.
Episode Transcript
Bitcoins had four months of negative net ETF outflows for the first time ever. But even though there's net negative outflows, we're still seeing inflows into it because net outflows doesn't mean that there's not positive inflows also coming in. And these tend to come from the longer term allocators. We still have some pension funds. We still have some asset managers purchasing this, and they're there for the longer term. And they are probably holding up the structural floor, but not enough to get us a quick v shaped rally. The following conversation is an extension of a recent episode all about the Bitcoin halving and how the new wave of institutional participation promises to shape the four year cycle moving forward. For For the best experience, be sure to go back and check it out if you missed it, and don't forget to hit like and subscribe so you don't miss any more. And with that out of the way, let's start the show. This episode is brought to you by Nexo. Step into a new era of digital wealth, earn interest on your digital assets, borrow against them without selling, and trade all in one platform. Get started at nexo.com/breakdown. Nothing said on the breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone in the show are opinions, not financial advice. Hosts and guests may hold positions in the company's funds or projects discussed. K. Welcome everybody to the breakdown. I'm your host, David Kinellis. With me is my special guest, Blockworks research analyst and host of the new Inflection Point podcast, Marc Arjun. Thanks for joining us today. Thanks for having me. Excited to be here. Yeah. I kinda wanted to jump off straight away into this whole thing about whether the Bitcoin halvings are really mechanically relevant to supply and demand dynamics because to me, I feel like that ship is, like, sailed a long time ago because there's, like, a lot of things in the Bitcoin space and the Bitcoin market that outweigh how many Bitcoins are mined every day. Like, a a lot of a lot of people like to bring it up that, oh, we're buying more Bitcoin than can be mined and all that kind of thing. And then, well, if you look at even just the top the top volume on exchanges that even the the buying pressure on exchanges outweighs how much how much Bitcoin supply has been released. So I'm just wondering, like, your take there. Like, am I way off base there in thinking that the the amount of Bitcoin mined every day, it does it it doesn't really matter anymore in terms of the market or or am I kinda underplaying it there? I know. It's kind of like a two sided coin because in one sense, it never it should have never really mattered because everybody knew what the supply …
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“Corporate adoption of permissioned or semi-public blockchains, such as JPMorgan migrating from its private Quorum network to Base, functions as an entry point into the broader crypto ecosystem.”
“Major publicly traded miners like Iron are selling Bitcoin holdings to fund gigawatt-scale AI data center buildouts, capitalizing on a structural data center shortage.”
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