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Key Highlights:
- Eric Jackson, founder of EMJ Capital believes that ETF allocators are driving recent Bitcoin selling.
- According to his analysis, short-term traders exit as sovereign, pension, and treasury capital steps in.
- Market recovery may hinge on tech fund stability and stablecoin inflows.
Eric Jackson, founder of EMJ Capital, believes the current slip in Bitcoin marks a transition in who owns the asset rather than a failure of the asset itself.
Jackson described the present phase as a period of “purification.” In his view, short-term traders and leveraged investors are gradually exiting. At the same time, a different class of capital is stepping in. This group includes sovereign wealth funds, corporate treasuries, and pension managers who often keep assets for decades. Their investment limit is longer and their trading activity is slower, and this will reshape how Bitcoin behaves in the years ahead.
Eric Jackson on Bitcoin’s Current Market Behaviour
According to Jackson, recent price action backs the notion that the market is in a reset phase. Bitcoin fell as much as 2.64% during Asian trading hours on February 24, sliding to almost $62,858. Losses for the month have now crossed 19 percent. If the trend continues, it will be the sharpest monthly drop since the market turmoil seen in 2022. The decline has been steady rather than sudden, and that pattern suggests continued distribution from large institutional holders.
$BTC didn’t fail as an asset. It succeeded as an ETF.
And that’s the problem.
From $126K to $63K. Every time IGV sells off, $BTC sells off with it.
That’s not a store of value.
That’s a high-beta tech position with a different logo.IBIT changed who owns Bitcoin.
In 2021, the…
— Eric Jackson (@ericjackson) February 24, 2026
Jackson points to exchange traded funds as the main source of this selling pressure. Over the past year, ETF products opened the door for traditional asset managers to gain exposure to Bitcoin. That development changed the profile of the marginal buyer. Earlier cycles were driven by retail investors and crypto-native funds. Now, the marginal buyer is often the same desk that trades large technology stocks and growth funds.
This shift has made Bitcoin behave more like a high-beta extension of the technology sector. When equity funds linked to tech stocks face outflows or rebalancing pressure, they reduce exposure across their portfolios. Bitcoin is now part of that basket. As a result, Bitcoin has shown a stronger correlation with tech indices than in earlier cycles.
Jackson believes this shift in correlation has unsettled investors who once thought of Bitcoin primarily as a store of value. Gold, by comparison, has performed strongly, rising sharply over the same period. Its holder base is dominated by central banks and long-term sovereign investors who rarely trade on short-term signals. Bitcoin’s holder base is still evolving toward that structure.
Despite this, Jackson does not view the ETF-driven selling as a long-term negative. Instead, he sees it as part of a general cycle in which weaker hands exit and stronger, longer-duration holders take their place. He notes that each major cycle has followed a similar pattern. Retail investors drove the 2017 peak. Investment funds shaped the 2021 rally. Institutional allocators defined the most recent cycle. The next stage, he argues, will be led by sovereign and pension capital that operates with multi-decade mandates.
The timing of the next recovery, according to Jackson, depends on two key factors. First, stability must return to technology-heavy equity funds that share overlapping investors with Bitcoin ETFs. Once that selling pressure eases, Bitcoin’s correlation may weaken. Second, the supply of stablecoins needs to expand again. Rising stablecoin supply typically signals fresh capital entering the digital asset market, rather than existing investors rotating between assets.
For now, stablecoin growth remains flat and that suggests new liquidity is yet to enter in a meaningful way. In the absence of fresh inflows, Bitcoin is left to absorb ongoing outflows from institutional desks, and this imbalance has contributed to the recent price slide.
Jackson wrote, “$BTC doesn’t go to $1M because of halving math.
It goes to $1M because the last class of sellers gets replaced by the first class of permanent holders.”
Jackson still believes that the fixed supply and global reach of Bitcoin continue to attract large pools of capital seeking assets outside the traditional monetary system. If sovereign funds and corporate treasuries increase their exposure over time, the holders could begin to resemble that of gold, which is valued in the tens of trillions of dollars globally.
Also Read: BlackRock Moves $150M in Bitcoin and Ethereum From Coinbase Custody