NYDIG: Bitcoin Demand Engine Reverses, But Long-Term Trend Remains Unchanged

According to PANews, NYDIG's research director Greg Cipolaro noted that the inflow of funds into crypto ETFs and demand for DAT previously drove Bitcoin to record highs, but now contribute to its price decline. He highlighted that a liquidation event in early October triggered ETF outflows, a collapse in DAT premiums, and a drop in stablecoin supply, signaling capital withdrawal from the system. Spot Bitcoin ETFs, once a major success, have now become a drag on Bitcoin's growth. Despite this, global liquidity and macroeconomic news still influence Bitcoin. During cyclical corrections, Bitcoin's dominance typically rises as capital flows back to the most mature asset. Bitcoin's dominance has fallen from over 60% in early November to around 58%. DAT and stablecoins were once key drivers of Bitcoin demand, but now DAT premiums are shrinking and stablecoin supply is declining, suggesting investors are pulling liquidity. Cipolaro believes the DAT sector still has room to absorb shocks and no signs of financial distress have emerged. Despite the recent pullback, he remains bullish on Bitcoin's long-term outlook, citing growing institutional interest and increasing sovereign demand. However, he warns that cyclical narratives are emerging and investors should prepare for further volatility.