February 26 News: As funds continue to flow into the Bitcoin ETF market, some investors are questioning why Bitcoin’s price has not yet broken through the key $150,000 level. Jeff Park, head of the Bitwise Alpha strategy, recently stated that the real limit on Bitcoin’s upward potential is not a single market maker, but the structural design and operational mechanism of the Bitcoin ETF itself.
Jeff Park explained that authorized participants (APs) hold a special position in the creation and redemption process of ETF shares, allowing them to perform more capital-efficient hedging operations within the “gray area” of regulatory rules. Unlike ordinary traders, APs do not need to rely entirely on the spot market when executing short or arbitrage strategies, which alters the traditional direct link between capital inflows and price movements.
A more critical point is the change in hedging methods. Theoretically, when an ETF trades at a premium, arbitrage firms should buy spot Bitcoin to correct the price gap. However, if they choose to hedge using Bitcoin futures or derivatives, no real spot buying demand is generated. This means that even if ETF capital inflows increase, they may not translate into sustained upward momentum in the spot market.
Additionally, the shift toward a “physical redemption” mechanism has weakened the previous structural constraint requiring the purchase of Bitcoin on the open market. Some institutions can access liquidity through over-the-counter channels, reducing the impact on the public market price discovery mechanism and further weakening the direct correlation between ETF capital inflows and Bitcoin price increases.
Jeff Park emphasized that there is currently no clear market manipulation, but the mismatch between traditional financial regulatory frameworks and Bitcoin’s decentralized nature creates a structural disconnect, making it difficult to clearly categorize arbitrage activities. This institutional friction may lead to continued increases in Bitcoin ETF capital inflows while Bitcoin’s price rises slowly, affecting market expectations for Bitcoin to break through the $150,000 target level.
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