Coinbase Bitcoin Premium Falls into Negative Territory for First Time Since May

Coinbase's Bitcoin premium has fallen into negative territory for the first time since May, indicating reduced demand from U.S. investors. Key points include:

• The Coinbase Bitcoin Premium Index is at -0.00254829, down from -0.01626105 on May 29.
• This index measures the price difference between Bitcoin on Coinbase and Binance, reflecting spot demand from investors.
• Recent demand primarily stemmed from Bitcoin ETFs, with Coinbase as custodian for eight of eleven funds.
• Net outflows from these funds reached $114.83 million on July 31, following a streak of outflows earlier in July.
• A profit-taking wave saw realized profits between $6 billion and $8 billion in late July, driven by new whales selling above $120,000.

Analysis indicates growing dominance of new investors in a stable market during this late bull cycle phase. Notable points include:

• The current demand-supply metric between new and old investors stands at 30%, lower than overheated levels seen previously.
• Cumulative activity of young coins has increased since July 2024, suggesting new buyers are entering the market.
• Pressure from old holders remains manageable.

As of now, Bitcoin is trading around $115,550, experiencing a decline in the last 24 hours.