Analysts Predict Bitcoin Will "Spiral Upward" Due to High ETF Trading Volume and Low Supply

Eric Balchunas, senior ETF analyst at Bloomberg, said a surge in demand for bitcoin from newly launched exchange-traded funds in the U.S., coupled with a decrease in available supply, could trigger a short-term speculative cycle for the digital asset.

"Because it's a scarce asset and there aren't a lot of people trading it - a lot of people are just holding - it has a very small float. the more demand there is for ETFs, the more the float is affected. The more the float is affected, the more the price goes up, which creates more demand," Balchunas said in an interview. "You could go through a spiral for a while."

He also warned that the rise in Bitcoin's price could be unsustainable and wondered aloud if there would be a period of adjustment that could bring people to their senses.