Analyst explains why ETF flows continue to drive bitcoin’s price — while treasury companies have muted impact

Bitcoin’s sluggish price action has revived debate over what truly drives the market. A strong correlation between Bitcoin exchange-traded fund flows and price returns contrasts sharply with bitcoin treasury companies, whose acquisitions often result in a net neutral market impact, according to digital asset brokerage and research firm K33.

As bitcoin trading slows and geopolitical tensions rise, some analysts have questioned whether ETF flows still influence price, K33 Head of Research Vetle Lunde noted in a Tuesday report. But recent data shows bitcoin’s price remains closely tied to ETF flows, with a strong R² of 0.80, explaining around 80% of the variance in 30-day BTC returns, Lunde said. Over the past month, the combined Bitcoin ETFs have added 13,000 BTC — marking the weakest 30-day inflow since April 23, and closely mirroring price action.

30-day returns vs 30-day flows. Image: K33.

In contrast, the rise of bitcoin treasury companies has had a more mixed impact on price, with recent data showing a weaker correlation between corporate bitcoin acquisitions and returns, according to Lunde. While firms like Strategy continue to buy bitcoin directly from the market using capital raised through debt or equity, impacting market demand, many newer entrants are taking a different approach.

Over 50 new treasury initiatives have launched in the past three months alone, with many of them acquiring bitcoin through in-kind share swaps with large holders. One example is the Softbank-backed Twenty One, which built its 37,230 BTC position by exchanging shares for bitcoin from Tether and Bitfinex. These in-kind swapping structures generate little to no net market demand for bitcoin, helping explain why treasury flows now have a more muted impact on price than ETF flows, potentially drawing capital away from direct bitcoin purchases, Lunde argued.

“With the massive momentum in bitcoin treasury companies of late, more investors are attracted to this trade and may seek to sell BTC spot to participate in ATM offerings or fund enterprises directly in-kind,” the analyst said. “These structures weaken the supply impact of treasury company purchases and may explain the soft R² of 0.18 between 30-day treasury flows and BTC returns.”

30-day returns vs 30-day public company changes. Image: K33.

Largest one-day decline in perps OI since last August

Bitcoin dropped as low as $98,200 last week amid U.S.–Iran tensions but rebounded to $105,000 on ceasefire talks, ending the week down just 1%. While the conflict may seem unrelated, its impact on oil, inflation, and risk sentiment has weighed on markets, triggering the largest one-day drop in bitcoin perpetual futures open interest since August 2024, with a 17,394 BTC decline as traders rapidly de-risked. This sharp reduction in leverage was driven by fears of a broader conflict, including potential disruption to the Strait of Hormuz, and funding rates briefly turned negative, Lunde said.

The leverage unwind has pushed open interest in perps below 260,000 BTC — levels last seen in April — implying traders are increasingly reluctant to take directional bets amid geopolitical uncertainty. While the ceasefire could calm nerves, upcoming U.S. events, such as President Trump’s budget bill and the July 9 tariff pause deadline, may keep bitcoin volatility high, Lunde added.

Daily change to Bitcoin perpetual open interest. Image: K33.

© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.