Economist Alex Krüger explains what he believes are the main reasons for the recent correction in the Bitcoin (BTC) and crypto markets.
Krüger shares with his 167,000 followers on the social media platform X his four main reasons for the decline in digital assets over the last week.
“Reasons for the crash, in order of importance
(for those who need them)
#1 Too much leverage (financing issues)
#2 ETH is driving the market lower (the market has decided the ETF doesn't exist)
#3 Negative BTC ETF inflows (Caution, data is T+1)
#4 Solana sh*tcoin mania (it went too far)…
I expected this correction. I expected it in April, not now.”
Blockchain investigator ZachXBT recently reported that over $122 million worth of Solana (SOL) was raised from various altcoin projects in a week, most of it for memecoins.
At the time of writing, Bitcoin, Ethereum (ETH), and Solana (SOL) have all significantly corrected their yearly highs.
In a new interview on the 1000x podcast, Krüger delves deeper into the inner workings of exchange traded funds (ETFs) and explains why he believes the Bitcoin bull market is still in its early stages.
“The reason we are early is because the institutional sales machinery is not yet fully deployed. According to some estimates, it is only 20% deployed and there are plans to expand significantly by the end of the year.
What does that mean, the sales machine?
If we think about it, how does the plumbing work on the ETF side? You have ETF buyers, [which] are retail and discount platforms. There are institutional people and there are financial advisors.
The financial advisors are basically divided into two or three tranches, depending on how you look at it. There are the so-called wirehouses: Merrill Lynch, UBS, Morgan Stanley and these people.
And then there are the RIAs (registered investment advisors), which are then divided into independent and non-independent. The non-independent ones are the advisors from Edward Jones and Wells Fargo.
What's happening there is that these people are very slowly starting to introduce an ETF to their people. They need to see a track record, they need to see the minimum AUM (assets under management), they need time. It needs to be approved.
We've seen headlines…in the last two weeks from Merill Lynch and UBS. They say they will start offering the ETF to their customers.
This is just beginning. We're very far from having the entire institutional distribution machinery in place on the wirehouse side and getting ETFs out to the people who actually want them.”
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