Tom Lee, co-founder of FundStrat and chairman of Bitmine Immersion Technologies, has assessed that a cryptocurrency bull market is already underway. As institutional investor capital continues to flow in, net inflows into spot Bitcoin (BTC) exchange-traded funds (ETFs) and companies' expanding digital asset holdings are emerging as key market variables.

Bull Market Assessment... Began in Late June

Chairman Lee, in a recent Bitmine announcement, evaluated that the cryptocurrency market's upward phase began in late June. He cited the rotation of capital from artificial intelligence (AI) into the cryptocurrency market and strengthening cryptocurrency fundamentals centered on tokenization and AI as background factors.

Continued Capital Inflows via Bitcoin ETFs

Institutional capital flows are particularly notable in the Bitcoin market. On the 29th, U.S. spot Bitcoin ETFs recorded approximately $66.2 million in net inflows. The ETF capital inflows continued even as Bitcoin traded around $83,000 to $84,000.

Looking at the broader recent trend, ETF capital inflows are even more pronounced. U.S. spot Bitcoin funds recorded about $2.4 billion in net inflows from September 21 to 25. As Bitcoin rose more than 40% over the past three months, capital flowing into ETFs—an institutional investment vehicle—served as a factor supporting demand in the spot market.

A Constraining Variable... High Treasury Yields

However, the macroeconomic environment surrounding the market is not favorable. The U.S. 10-year Treasury yield recently exceeded 5%, showing its highest level since 2007. High Treasury yields increase the appeal of risk-free assets and can weigh on risk assets including Bitcoin. In fact, rising Treasury yields have been cited as one of the reasons behind the recent slowdown in Bitcoin's rally.

Bitmine Holds 4.9% of All Ethereum

The scale of Ethereum (ETH) accumulation by Bitmine, led by Chairman Lee, is also drawing attention. According to documents filed with the U.S. Securities and Exchange Commission (SEC), as of September 20, Bitmine held 5,983,940 ETH. This amounts to 4.9% of Ethereum's total supply of approximately 122.1 million coins. Bitmine stated that it is staking 5,067,309 ETH of this amount.

Bitmine is pursuing a strategy to secure 5% of Ethereum's total supply, and also holds 212 Bitcoin along with cash and securities.

Key Variables to Watch in Q4

The market interprets Bitcoin demand through ETFs and large-scale corporate Ethereum accumulation as indicators of expanding institutional participation. However, it is difficult to conclude definitively that such capital flows will translate into sustained price increases.

In particular, in the fourth quarter, changes in institutional investors' cryptocurrency allocations, the sustainability of ETF net inflows, and the direction of U.S. Treasury yields and Federal Reserve (Fed) monetary policy are expected to be key variables. Whether new capital continues to flow into digital assets even in a high interest rate environment is cited as a crucial point in determining the direction of the cryptocurrency market.

[The cryptocurrency market is highly volatile, and market outlooks may not match actual price movements. ETF capital flows and expanding institutional investment do not guarantee price increases for any specific cryptocurrency, and responsibility for investment decisions and resulting gains or losses rests with the investor. AI was used in compiling some of the material.]