@Sakura please summarize this article, thanks uwu.
TLDR
Despite impressive US ETF inflows, a market-neutral Cash-and-Carry trade appears to be subduing buy-side pressure, requiring non-arbitrage demand to further stimulate price action. Additionally, a divergence between declining active addresses and surging transaction counts has emerged due to the rise of the Runes protocol.
Key Points
Declining active addresses but surging transaction counts due to the Runes protocol
US Spot ETFs now hold 862k BTC, accounting for over 27% of the adjusted supply
Cash-and-Carry trade structure is a significant source of ETF inflow demand, with hedge funds building up a large net short position
In-depth Summary
The article explores a divergence between declining active addresses and increasing transaction counts on the Bitcoin network. This is largely attributed to the emergence of the Runes protocol, which has significantly altered how on-chain activity metrics should be perceived.
Runes utilizes the OP_RETURN field to encode arbitrary data on the chain, requiring less blockspace compared to Inscriptions and BRC-20 tokens. As a result, Runes-related transactions have now displaced Inscriptions and BRC-20 tokens, commanding an impressive 57.2% of daily transactions.
Another divergence highlighted is the stagnant price movement despite impressive inflows into US Spot ETFs. The article suggests that a market-neutral Cash-and-Carry trade structure, where traders are coupling the purchase of a long spot position with the sale of a futures contract, is a significant source of ETF inflow demand. This has largely neutered the buy-side pressure from ETF inflows, suggesting that organic non-arbitrage demand is required to further stimulate positive price action.
ELI5
The article talks about two interesting things happening in the Bitcoin world:
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The number of active Bitcoin addresses is going down, but the number of Bitcoin transactions is going up. This is because of a new way to use Bitcoin called “Runes” that doesn’t need as many addresses but still uses a lot of transactions.
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Even though a lot of money is flowing into Bitcoin ETFs (funds that let people invest in Bitcoin), the Bitcoin price isn’t going up as much as you might expect. This is because some traders are doing a special kind of trade where they buy Bitcoin and sell Bitcoin futures contracts at the same time, which cancels out the buying pressure from the ETFs.
Writer’s Main Point
The main point the article is trying to make is that the Bitcoin network is experiencing some interesting divergences in its on-chain activity metrics, driven by the emergence of new protocols like Runes. Additionally, the market-neutral Cash-and-Carry trade structure is dampening the buy-side pressure from ETF inflows, suggesting that organic non-arbitrage demand is needed to further stimulate positive price action.