FameEX Hot Topics | Bitcoin Demand Slows Sharply Yet Long-Term Trajectory Remains Intact – NYDIG

NYDIG’s latest weekly report argues that Bitcoin’s current plunge to multi-month lows is being fueled by the exact mechanisms that powered its October all-time high. Head of Research Greg Cipolaro highlights that massive spot Bitcoin ETF inflows and aggressive corporate treasury purchases (DAT demand) were the twin engines behind the final leg of the 2024 rally. A violent liquidation cascade in early October, however, flipped both drivers into reverse almost overnight, transforming reliable tailwinds into powerful headwinds and sparking what NYDIG calls genuine capital flight rather than simple fear or positioning washouts.

Cipolaro describes the sudden collapse of treasury premiums, the reversal of ETF flows, and the contraction in stablecoin supply as textbook symptoms of a broken “reflexive loop.” When this self-reinforcing cycle of liquidity and leverage stalls, history shows a remarkably consistent sequence: credit tightens, new leverage struggles to take root, and once-popular narratives stop attracting fresh money. “We’ve watched this exact script play out in every major cycle,” he writes. “The headlines and characters change, but the mechanical pattern never does.”

Once the undisputed star of this cycle, spot Bitcoin ETFs have shifted from a steady inflow machine to a material source of selling pressure. Additional weight comes from deteriorating global liquidity, unpredictable macro headlines, stressed market structure, and shifting investor psychology. As always during deep drawdowns, Bitcoin dominance is climbing sharply as capital flees speculative altcoins and consolidates into the most battle-tested, liquid asset in crypto—a dynamic NYDIG says is repeating with textbook precision.

Despite the near-term pain, NYDIG remains unwavering on Bitcoin’s long-term trajectory. Institutional adoption continues its steady march forward, sovereign interest is quietly accumulating, and Bitcoin’s fundamental value proposition as a neutral, programmable, scarce monetary asset is arguably stronger than ever. “Recent weeks have done nothing to damage that multi-year secular story,” Cipolaro insists. What has changed is that short-term cyclical forces—flows, leverage, and reflexive sentiment—are now firmly in the driver’s seat. Investors should brace for a volatile, psychologically draining stretch filled with abrupt dislocations, even while the broader bull case remains solidly intact.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.