As crypto markets continue to fluctuate, a new study suggests that Bitcoin’s current price may be lagging behind institutional demand. According to analysis by research firm Bitwise, Bitcoin is claimed to be trading approximately 40% below its theoretical “fair value” based on fund flows entering global exchange-traded products (ETPs). André Dragosch, the company’s head of research, states that the model is based on the historical relationship between institutional investor behavior and price movements.
Institutional Fund Flows Have Become Determinants of Bitcoin Price
With the launch of spot Bitcoin ETFs in 2024, the influence of institutional investment vehicles on crypto has increased significantly. Heavy inflows, especially into US-based ETFs, absorbed a significant portion of Bitcoin’s new supply, changing the liquidity balance in the market. According to experts, the money entering these products is now considered a decisive economic indicator as much as on-chain activity.
This structural transformation reveals that the Bitcoin price is shaped not only by individual investor psychology, but also by large capital flows entering regulated financial instruments. Analysts argue that the divergence between price and ETP flows is usually temporary and the market realigns to the institutional demand level over time. The current table emphasizes that this difference is unusually wide.
Risk Appetite Could Trigger a New Rally
Another point that the research draws attention to is the nature of market cycles. While institutional capital tends to reduce Bitcoin allocations during risk aversion periods, prices can recover quickly during phases when risk appetite returns. Therefore, a renewed increase in ETP demand is considered as a potential catalyst that could cause Bitcoin to gain value in a short time.
This picture also coincides with another development that has come to the fore recently. News that global financial giants will accelerate stablecoin integration indicates that the integration of digital assets with traditional finance is deepening. In particular, the preparation of banks for limited stablecoin acceptance is interpreted as corporate entries into crypto may move into a new phase. Analysts think that this trend may indirectly affect not only the stablecoin market but also the price dynamics of leading assets such as Bitcoin.
Despite this, some market observers are cautious. It is stated that factors such as macroeconomic uncertainties, interest policies and regulation discussions may slow down corporate flows. Therefore, whether Bitcoin can bridge the potential value gap will largely depend on the direction of global risk appetite.
