On July 4, 2026, CryptoQuant released the latest periodic report focusing on "Bitcoin capital efficiency," which was soon cited by media including CoinDesk. On the same day, the agency's analyst Axel Adler Jr. stated on the X platform that Bitcoin is in the late stage of a bear market cycle and emphasized that the U.S. spot Bitcoin ETF sector "has sent signals for the first time that selling pressure is easing." The context for this judgment is a more sobering data framework provided in the report: in past cycles, Bitcoin's capital efficiency has been declining, with the price increase per $1 of new funds constantly diminishing. CryptoQuant estimates that the next large-scale bull market may require approximately $1 trillion in new funds to trigger a similar level of market movement, and this figure is merely an analytical estimate based on historical data, with its underlying assumptions undisclosed and should not be regarded as any form of target or commitment. In stark contrast to this "trillion-dollar threshold" is data from a single source indicating that the U.S. spot Bitcoin ETF recorded only about $223 million in total net inflow on the most recent trading day, which has already been seen as an early signal of a phase of capital return and easing selling pressure. This also sets the tone for the current core contradiction: at a time defined as the end of the bear market, can the limited return of ETF funds adequately accumulate enough ammunition for the next market cycle in the context of declining capital efficiency?

From 55,000% to 10,000%: Capital efficiency visibly declines

The so-called "declining capital efficiency" refers to the continuous decrease in the extent to which every $1 injected into Bitcoin raises its price across different cycles. In more direct terms, the same scale of net buying that could have boosted prices by dozens or even hundreds of times in the early stages can only yield significantly lower percentage increases in the later stages.

CryptoQuant's single-source estimation provides an extreme comparison: in the 2011 cycle, about $2.8 billion flowed in, with an estimated price increase of approximately 55,000%; whereas in the 2015 cycle, the net inflow swelled to around $69 billion, but the price increase was only about 10,000%. The scale of funds rose from several billion to nearly $100 billion, but the "lifting ability" per unit of funds has significantly weakened. The report attributes this efficiency decline mainly to Bitcoin's market capitalization expanding from several billion dollars to the trillion-dollar level; the larger the base, the more limited the marginal lift that the same $1 provides. It should be emphasized that the basis for the "net capital inflow" metrics (for example, whether based on on-chain flows or exchange net buying) is not disclosed in the briefing, so these figures can only be seen as relative magnitudes derived from a unified but undisclosed calculation framework, rather than precise funds statistics.

Trillion-dollar threshold: How much ammunition is needed for the next major bull market?

Within the aforementioned framework of declining capital efficiency, a key conclusion provided by CryptoQuant is that to drive the next "large-scale" Bitcoin bull market, approximately $1 trillion in new capital inflow may be necessary. The starting point for this figure is straightforward—when the price increase brought by each $1 is lower than in previous rounds, and the overall asset size is at the trillion-dollar level, duplicating the magnitude of past price increases requires thicker funding to move a more inelastic price response. It is crucial to reiterate that this trillion dollars is only an analytical estimate based on a single calculation framework, intended to delineate a threshold magnitude, and does not represent any form of definitive target or commitment; the briefing also did not disclose corresponding time spans, price ranges, or other underlying assumptions.

Whether it is possible to "assemble" such a level of capital in the medium to long term essentially goes beyond the scope of a single asset and depends on whether macro liquidity aligns with expansion. The briefing reminds readers that at least two variables should not be overlooked: first, the monetary policy path of major central banks represented by the Federal Reserve, which determines the global risk-free interest rate and the tightness of systemic liquidity; second, the risk appetite of global investors, and how they allocate capital among risky assets. Only in scenarios where interest rates and liquidity conditions allow, and where risk appetite shifts back to high volatility assets, could a trillion-dollar level of incremental capital be gradually activated through various channels, including the U.S. spot Bitcoin ETF; otherwise, this threshold seems more like a yardstick to measure the difficulty of the future bull market rather than a simple timeline benchmark.

$223 million return: Initial easing of selling pressure from Bitcoin ETFs

In the current environment where macro liquidity has not truly expanded, the U.S. spot Bitcoin ETF sector recorded approximately $223 million in total net inflow on the most recent trading day (according to a single source), becoming a key window for observing capital sentiment. Among these, FBTC had a net inflow of about $166 million, while ARKB had about $91.8 million net inflow, marking the main sources of incremental capital on that day, indicating that since its approval in early 2024, the ETF serving as an "entry channel" has again attracted a significant amount of institutional capital return.

Axel Adler Jr. views this $223 million net inflow as the first signal that "selling pressure is easing." The core aspect is the clear contrast between the direction of funds and the previous net redemption phase: prior net redemptions meant capital exiting through the ETF channel was predominant, whereas now there is significant capital re-entering the same channel, indicating that at least some institutions are no longer predominantly focused on reducing positions but are beginning to tentatively increase holdings by leveraging price corrections. Within the framework he constructed for the "late stage of the bear market," this inflection point from net redemptions to net inflows is seen as early evidence of selling pressure being gradually absorbed by new buying after high sell-offs.

Portrait of the late stage of a bear market: Chip accumulation and quiet institutional entry

In Axel Adler Jr.'s framework, the "late stage of the bear market cycle" is first reflected in the structure of funds and turnover: price volatility remains, but the overall turnover rate is slowing, and the concentrated selling pressure caused by high-frequency stop losses and passive redemptions is beginning to diminish. CryptoQuant views the recent total net inflow of about $223 million into the U.S. spot Bitcoin ETF as the first visible signal of "easing selling pressure" in this stage: sellers who were continuously reducing positions through ETFs are no longer dominant at this point, with the subscriptions of products like FBTC and ARKB being amplified again, indicating that the funds willing to absorb in the current price range are increasing, rather than simply rotating chips back again.

Compared to previous cycles, a key difference in this round is the constraints of declining capital efficiency and high capital thresholds. The CryptoQuant report notes that each additional $1 in funds exerts a diminishing lifting effect, and given that market capitalization is at the trillion-dollar level, the end of the bear market relies more on the slow accumulation of institutional and long-term funds received through channels like ETFs, rather than a "V-shaped reversal" caused by an instantaneous turnaround in sentiment. Chips are gradually concentrating on accounts with longer holding periods both on-chain and off-chain, while short-term speculative activity declines, forming a typical "sediment" portrait of the late bear market. It needs to be emphasized that Axel Adler Jr. has only given a qualitative judgment of "at the late stage of a bear market" without providing a quantifiable time anchor for when this stage might end; prices could very well extend this window through oscillation or even probing lower points, meaning that the "late stage" of the bear market does not equate to the immediate onset of the next major upward wave.

At the trillion-dollar threshold: How to understand this round's bear market ending

Within the framework of CryptoQuant, the key signals of this cycle are indeed quite clear: on one hand, the decline in Bitcoin's capital efficiency is an established fact. From approximately $2.8 billion in 2011 driving a price increase of about 55,000%, to around $69 billion in 2015 corresponding to about a 10,000% increase, the expansion of the market capitalization base has raised the threshold for the new capital required for the next large market movement. The analytical estimate of "around $1 trillion" is essentially a reminder that to replicate historical-level price increases in the future will require real capital several magnitudes larger than the current figures. On the other hand, Axel Adler Jr. currently defines it as the late stage of the bear market, with the recent single-day net inflow of about $223 million into the U.S. spot Bitcoin ETF (with FBTC about $166 million and ARKB about $91.8 million) indicating only a temporary easing of selling pressure and that institutional capital is beginning to marginally return, still at a very early probing stage compared to the trillion-dollar capital demand. For investors, the more actionable approach is not to speculate on "when the bear market will end" or "how high prices can go," but rather to establish a data-priority tracking system: continuously observing whether the net inflow into the ETF is a momentary spike or maintains positivity across weeks and quarters, combined with changes in on-chain chip concentration and the tightening or loosening of the macro liquidity environment, rather than linearly extrapolating "1 trillion dollars" into specific price or time commitments; at the snapshot of July 4, 2026, all discussions concerning the bear market's end and the trillion-dollar threshold should be viewed as a risk framework for capital structures and rhythms, rather than a deterministic script for the next bull market path. What will genuinely influence the outcome are whether channels like ETFs can continuously absorb net inflows far exceeding the current levels and the evolution of the global liquidity cycle over the coming years.

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