Why Bitcoin Is Trapped In A Range Despite Record ETF, Treasury Company Flows

Bitcoin's BTC/USD price may continue to stay within its current trading range despite rising institutional interest and significant ETF inflows, according to Michael Bucella, managing partner at Neoclassic Capital.

In an interview with CNBC on Tuesday, Bucella explained that although demand for Bitcoin is strong, structural factors are preventing further price movement.

“ETF inflows have been enormous, I think $4 billion in June alone,” Bucella said, highlighting the surge of institutional capital entering Bitcoin through regulated products.

However, he pointed out that this demand is not directly translating into higher prices.

Bucella said that some investors are rotating out of Bitcoin spot positions and into crypto-related equities like Coinbase COIN, Circle USDC/USD, and Bitcoin treasury companies, shifting how they gain exposure to the asset class.

“There’s people replacing Bitcoin spot risk with Circle or Coinbase or treasury companies,” he noted.

One of the key supply-side pressures, according to Bucella, comes from Bitcoin miners who are now operating on increasingly narrow margins.

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“If you don’t have highly credible, high top assets with great operating teams to pivot to at least attempt to get an AI contract or a hyperscaler contract, you have to sort of run these sometimes loss operating models,” Bucella said.

He added that this is leading some miners to sell Bitcoin to sustain their operations.

Despite Bitcoin’s year-to-date gains of approximately 15%, Bucella noted that the asset's performance has not aligned with the strength seen in broader equity markets.

“It is a bit surprising to have seen the price of Bitcoin stay stuck in this sort of range,” he said.

Why It Matters: Bucella also commented on Bitcoin's behavior during recent geopolitical tensions.

During the Israel-Iran conflict escalation, Bitcoin sold off, showing that it continues to behave like a risk asset rather than acting as a defensive hedge.

“If it’s not going to [act like digital gold], to me, its most valuable kind of selling point is when it acts like digital gold,” Bucella said.

Looking at the broader market, Bucella observed that demand remains strong for Bitcoin treasury companies, but smaller firms may need to develop more diversified models beyond simply holding Bitcoin to remain attractive to investors.

He also commented on Circle's valuation surge following its IPO, suggesting that the company's potential to reshape payment systems, rather than simply its stablecoin issuance, may be what investors are focusing on.

“What Circle represents is potentially destabilizing the traditional payments and traditional capital markets rails,” Bucella said.

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