BTC buoyed above $100k by ETF and OTC flows

Perhaps inevitably, Bitcoin's tussle with $100,000 – which it's currently winning, according to our CME CF Bitcoin Reference Rate (BRR) - is now commonly regarded as a threshold between 'constructive' short-term sentiment, and a supposedly more bearish outlook for the OG crypto, if below.

Capital market professionals might well regard such suppositions as unsophisticated. And they would be correct.

Still, that doesn't detract from the sway of such assumptions - even with the same cohort!

So, it seems a day after the inauguration of the most pro-crypto U.S. President yet, BTC's ability to maintain its re-established position above $100k could be indicative.

There are other corroborative pointers.

As CF Benchmarks Research Analyst, Mark Pilipczuk points out in this article in The Block, a recent rise in CME Bitcoin implied volatility, for long-dated out-of-the-money calls, represents a pivot compared to prior weeks, when puts were more in demand.

"Bitcoin has recently come up over the $100,000 level from the low $90,000s, whenever the market turns bullish we tend to see more appetite for the deep OTM calls to capture the potential upside."

Pilipczuk ties some of the impetus to reports suggesting Donald Trump will blast out a flurry of pro-crypto executive orders in coming days.

"We saw price respond shortly after these news stories broke, notably in the last two days the IV for the shortest expiry 5 delta puts fell. It's likely that demand for downside hedging decreased as potential favorable regulatory changes get closer."

Meanwhile, Julio Moreno, Head of Research at CryptoQuant, comments in the same article on a significant increase in dollar-denominated OTC flows at Coinbase Prime, a leading digital asset prime broker, if not the largest. Flows reportedly reached $14 billion recently, equating to approximately 142,000 bitcoin.

Moreno connects the recent surge partly to strengthening BTC ETF flows. Coinbase Prime is an intermediary for certain issuers.

Issuers need to ramp bitcoin purchases to meet rising demand for creation units under conditions like these.

In fact though, CF Benchmarks partner FalconX is widely recognised as the world's largest crypto prime brokerage, by trading volume, serving as a major counterparty to a wide variety of spot bitcoin ETF participants.

The group's Head of Research, David Lawant, observed in a recent Market Commentary note: "the share of global spot BTC and ETH trading during U.S. trading hours is brushing an all-time high of almost 60%."

"Liquidity trends could once again serve as a compass for confirming this potential new market phase", Lawant continued. "The playbook that served us well through recent market regime changes should prove valuable here as well."

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