Bitcoin Faces Supply Shock as ETF Buying Quietly Builds Pressure, Bitwise CIO Warns
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Bitwise Chief Investment Officer Matt Hougan has argued that Bitcoin may be nearing a powerful price breakout. This could be driven by sustained demand from exchange-traded funds (ETFs). In a detailed post shared on X this week, Hougan reportedly said that Bitcoin’s price has stayed relatively restrained, but ongoing ETF purchases are steadily absorbing the available supply.
He explained that this pattern closely mirrors gold’s delayed but sharp rally in recent years. This suggests that Bitcoin could be entering a similar phase of structural tightening. A major price reaction could follow.
Lessons From Gold’s Delayed Price Surge
Hougan has reportedly explained that both gold and Bitcoin are priced primarily by supply and demand dynamics. As it stands, the CIO has noted that the common explanation for gold’s 65% rise in 2025 was as a result of aggressive central bank buying due to rising geopolitical risks and financial uncertainty. However, he argued that the real story began much earlier.
He stated that despite this strong demand, gold prices did not immediately respond because the market initially had enough willing sellers to absorb the buying pressure. Data shared by Hougan showed that annual central bank gold purchases averaged between 400 and 600 tonnes from 2014 to 2019, fell sharply in 2020, and then rebounded in 2021.
To this end, it was revealed by him that buying later surged beyond 1,000 tonnes in both 2022 and 2023, remaining high in 2024, stating that once excess supply was gradually absorbed, prices finally reacted sharply.
Bitcoin ETFs Absorbing New Supply
Hougan reportedly said that a similar process is now unfolding in the Bitcoin market. Since the launch of spot Bitcoin ETFs in January 2024, he noted that these funds have consistently purchased more Bitcoin than is newly mined. Despite this, Bitcoin’s price has not entered a parabolic phase because long-term holders have been willing to sell into the demand.
He explained that if ETF inflows continue at current levels, those sellers may eventually be exhausted. When that happens, Hougan suggested that Bitcoin’s limited supply could trigger a rapid price adjustment.
Finally, Bitwise’s CIO concluded that Bitcoin is currently experiencing a long absorption phase, a process that should not be mistaken for repricing, with institutional demand steadily tightening market conditions.
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