Wall Street ended Bitcoin's wild rallies, says 10x Research's Markus Thielen
Bitcoin's days of back-to-back double-digit price surges are over, according to Markus Thielen, founder of research firm 10x Research. In an interview on Cointelegraph's Trade Secrets podcast, he said Wall Street traders and profit-taking whales have reshaped the market.
Thielen is the author of Crypto Titans, a history of the crypto industry. The comments below are his views and estimates, not confirmed market facts.
The main takeaways
- Thielen says institutional traders selling call options after rallies have made Bitcoin's explosive price moves less common. A call option is a bet that a price will rise; selling them after a rally adds selling pressure.
- He estimates market makers account for up to half of the roughly $60 billion in net inflows into US spot Bitcoin ETFs — funds that hold Bitcoin directly and trade on stock exchanges. In his view, those firms hold ETF shares to hedge options trades, not as a bet that the price will rise.
- He still expects Bitcoin to reach $90,000 by year-end, but thinks a drop into the mid-to-high $70,000s could come first.
- He has been bearish on Ether for more than a year and wants a stronger link between Ethereum's use and the financial benefit to its holders.
How Wall Street reshaped Bitcoin's rallies
According to Thielen, institutional traders who sell call options once a rally finishes have taken the violence out of Bitcoin's price moves. Combined with whales taking profits, this makes the explosive runs of earlier years less likely.
He also said each crypto cycle has brought different promoters, and different promoters bring in different investors. This time the promoters come from Wall Street, where traders react to economic data and Federal Reserve decisions. In his view, Bitcoin now tends to jump on news, then move sideways until the next big macro event.
Half of ETF inflows may be hedging, not buying
Thielen reviewed Form 13F filings, which disclose certain securities holdings of investment managers. Based on that review, he estimates market makers make up as much as half of the about $60 billion in net spot Bitcoin ETF inflows. Those firms hold ETF shares to hedge their options trades. "So in the end it was not outright buying," he said.
He noted the first wave of ETF money also included retail investors buying through institutions and corporate vehicles, some of whom paid substantial premiums to the value of the underlying crypto. He still expects institutions and sovereign wealth funds to enter later. These are his estimates, not verified fund-by-fund data.
Thielen's year-end forecast and the Fed
Thielen predicts Bitcoin will reach $90,000 by year-end, with a possible drop into the mid-to-high $70,000s first. This is his forecast, not a confirmed outcome.
The market context in the source: Bitcoin fell to about $76,100 on Friday after a $6.3 billion hack of Binance, and finished October down 7.3%, according to Coinglass. The Federal Reserve raised its benchmark rate by a quarter of a percentage point in September, to a target range of 3.75%–4%, then held rates steady last Wednesday in a split vote, with two officials voting for another increase.
Thielen expects one more rate hike by December, followed by a more cautious approach that he thinks could help Bitcoin rally toward year-end.
Ethereum needs to pay holders, Thielen says
Thielen expects Bitcoin to outperform Ether. His argument: too much of the value from Ethereum activity goes to layer-2 networks, which are separate networks built on top of Ethereum to make transactions cheaper.
Making those networks cheap was a deliberate Ethereum design choice, but it affects the investment case. Ethereum burns the base fees users pay, removing those coins from circulation, and its supply shrinks when the amount burned exceeds new ETH issued to validators. Lower fees mean less ETH is destroyed.
"I look at it more as like a valuable utility, but nobody wants to pay for it," Thielen said, comparing Ethereum to a highway everyone wants to use but nobody wants to fund. He pointed to the decentralized perpetuals exchange Hyperliquid as a contrast: its assistance fund converts trading fees into HYPE tokens, which are then burned. He wants Ethereum to build a stronger connection between network use and the benefit to holders.
Sources
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