FameEX Hot Topics | NYDIG: Bitcoin Demand Engines in Reverse, But Long-Term Bullish Path Unchanged

According to NYDIG’s latest research note, the same forces that propelled Bitcoin to its October all-time high are now driving it to multi-month lows. Head of Research Greg Cipolaro points out that spot Bitcoin ETF inflows and corporate digital asset treasury (DAT) buying were the primary demand engines of the latest rally. However, a sharp liquidation event in early October abruptly reversed both trends, turning previous tailwinds into significant headwinds and triggering what NYDIG describes as “actual capital flight” rather than mere sentiment deterioration.

Cipolaro explains that the collapse of treasury premiums, the reversal of ETF inflows, and shrinking stablecoin supply represent classic signs of a broken “reflexive loop.” Historically, once this self-reinforcing cycle of liquidity and leverage loses momentum, markets follow a predictable pattern: liquidity tightens, attempts to rebuild leverage fail, and supportive narratives no longer translate into real capital flows. “We’ve seen this movie in every major cycle,” he notes. “The characters and plot lines change, but the underlying mechanics remain identical.”

Spot Bitcoin ETFs, previously the standout success story of this cycle, have flipped from consistent inflow machines into a meaningful drag on price. Broader factors—including global liquidity conditions, macroeconomic headlines, market-structure stress, and behavioral dynamics—are also weighing on Bitcoin. During cyclical drawdowns, Bitcoin dominance typically surges as riskier altcoins unwind faster and capital seeks refuge in the most liquid, established asset in the ecosystem—a pattern NYDIG observes playing out again right now.

Despite the painful short-term reversal, NYDIG emphasizes that Bitcoin’s long-term secular trajectory remains firmly intact. Institutional adoption continues to grow, sovereign interest is gradually building, and Bitcoin’s unique role as a neutral, programmable monetary asset is stronger than ever. “Nothing over the past few weeks alters that multi-year story,” Cipolaro stresses. However, the cyclical forces—driven by flows, leverage, and reflexive sentiment—are now dominating price action. Investors should prepare for an uneven, emotionally taxing road ahead marked by sudden dislocations, even as the bigger-picture outlook stays bullish.

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