Wall Street trading and profit-taking by large holders are changing Bitcoin’s market rhythm, according to 10x Research founder Markus Thielen. He says repeated double-digit surges may become less common as institutions sell call options after prices rise, while still expecting Bitcoin to potentially reach $90,000 by year-end after a possible pullback into the mid-to-high $70,000s.
Thielen, also the author of Crypto Titans, said each crypto cycle draws a different mix of promoters and investors. This time, participants are more closely tied to Wall Street, where decisions often turn on economic data and Federal Reserve policy. Bitcoin may therefore jump on a headline and then trade sideways as markets wait for the next major macroeconomic catalyst.
ETF inflows do not all signal bullish bets
Thielen examined roughly $60 billion in cumulative net inflows to U.S. spot Bitcoin ETFs and estimated that market makers may account for as much as half. Market makers sometimes hold ETF shares to hedge options trades, so those holdings do not necessarily reflect a bet on further gains. He based the estimate on investment managers’ 13F filings and said this portion of inflows was not made up of direct, directional Bitcoin positions.
Some early spot ETF investors were also retail investors investing through institutions and corporate structures. At times, buyers paid a notable premium to the value of the crypto assets underlying the products. Thielen said more traditional institutions and sovereign wealth funds may enter the market, but cautioned against treating all current ETF inflows as evidence that this kind of long-term capital is already invested.
Fed policy shapes the year-end target
Bitcoin had recently traded in the mid-to-high $70,000s and briefly fell to about $76,100 on Friday. The decline came after news of a $6.3 billion hack involving a wallet linked to Binance. Bitcoin fell 7.3% in October.
Thielen compared the recent recovery with Bitcoin’s move from about $20,000 to $30,000 in early 2023. He said skepticism about the current rebound is familiar: many investors are still waiting for another pullback before looking for a chance to buy back in.
Federal Reserve policy is another factor in his year-end outlook. In September, the Fed raised its benchmark rate by 25 basis points to a target range of 3.75% to 4%. On October 28, it held rates steady in a divided vote, with two officials supporting another 25-basis-point increase. The Fed said inflation remained elevated and left the door open to further hikes.
Thielen expects a possible rate increase in December, followed by a more cautious approach. If pressure for further hikes eases, he said, conditions for Bitcoin to move toward $90,000 by year-end could improve.
Thielen questions how Ethereum holders capture value
Thielen expects Bitcoin to outperform Ether. He argued that some of the value generated by activity on Ethereum flows to layer-2 networks, leaving ETH holders without a clear economic return from rising network use. He compared Ethereum to a road that everyone wants to keep open and well maintained, but few are willing to pay to use.
Ethereum burns the base transaction fees users pay. When the amount burned exceeds new issuance to validators, ETH’s total supply falls. Lower network fees can mean less ETH is burned, affecting supply changes and the token’s value proposition. Lower transaction costs are part of Ethereum’s development, Thielen said, but they also make the link between network use and returns to token holders harder to explain.
As a contrast, he pointed to decentralized perpetuals exchange Hyperliquid. Its assistance fund uses trading fees to buy HYPE and then burns the tokens. Thielen said he wants Ethereum to establish a clearer connection between network activity and financial value for holders, consistent with his cautious stance on ETH over the past year and more.