Bitcoin ETF Demand Grows as Crypto-Native Activity Slows, CryptoQuant CEO Says

TLDR:

• CryptoQuant CEO Ki Young Ju says TradFi ETF demand is bullish for Bitcoin but crypto-native buying has slowed down.
• U.S. spot Bitcoin ETF approvals in 2024 brought institutional capital into BTC through retirement and brokerage accounts.
• Exchange BTC reserves have declined as ETF holdings rise, pointing to long-term institutional accumulation of Bitcoin.
• Altcoins remain weak as they depend on crypto-native liquidity, while Bitcoin benefits from a separate institutional demand pipeline.

Bitcoin market structure is shifting as institutional buyers enter through ETFs while crypto-native trading activity cools.

CryptoQuant CEO Ki Young Ju recently flagged this divergence, raising questions about who drives Bitcoin prices going forward.

His comments point to a broader transition in how capital flows into the crypto market. The contrast between rising ETF demand and weaker altcoin activity is becoming harder to ignore.

Institutional Capital Is Reshaping Bitcoin’s Buyer Base

Since the U.S. approved spot Bitcoin ETFs in January 2024, Wall Street participation has grown steadily. Capital is now entering Bitcoin through brokerage accounts, retirement funds, and institutional custody rather than crypto exchanges. ETF holdings have continued rising while exchange BTC reserves have declined over the same period.

Ki Young Ju captured this shift in a recent post, stating: “Crypto ETFs on TradFi were bullish. Stocks on crypto exchanges are bearish. If crypto natives stop buying crypto, who is left to buy?”

This reflects a real change in how Bitcoin is being accumulated. RIAs, pension-related capital, and large asset managers are now active participants in Bitcoin price formation. Their buying behavior differs from retail crypto traders in both scale and time horizon.

As a result, Bitcoin is no longer dependent solely on internal crypto market liquidity. The institutional pipeline through ETFs provides a steady demand channel that did not exist before 2024. This has helped Bitcoin maintain price resilience even as broader crypto sentiment has softened.

Altcoins Face a Liquidity Gap Without Crypto-Native Buyers

While Bitcoin benefits from institutional inflows, most altcoins still rely on crypto-native traders for demand. BTC dominance has stayed elevated through much of 2025, and ETH/BTC has continued to underperform against broader market expectations. Spot trading volume on centralized exchanges has also declined since late 2025.

On-chain data further shows weaker aggressive buying activity among retail and crypto-native participants. Speculative appetite across the altcoin market has broadly dropped, and fewer traders are rotating profits from Bitcoin into smaller assets. This has left many altcoins without a reliable buyer base.

The divergence between Bitcoin and altcoins is therefore a liquidity story, not just a sentiment one. Capital is concentrating into Bitcoin and a small number of major assets rather than spreading across the market. Altcoins that once benefited from crypto cycle rotations are seeing that pattern weaken.

This does not mean the market is entirely bearish. Rather, the crypto market appears to be transitioning from a crypto-native cycle into a TradFi-driven Bitcoin market.

Bitcoin now operates within two separate demand ecosystems, while most altcoins remain dependent on just one.