Incoming Demand Shock and Multiplier Effect: Crypto Market Preparing for Strong Momentum, Says Sygnum CIO Fabian Dori

In an interview with Cryptonews.com, Fabian Dori, CIO at digital asset bank Sygnum, discusses a potential long-term demand shock, the power of “the multiplier effect”, shrinking BTC liquid supply, expanding ETF demand, the effect the shift has on the crypto market, and more.

In a recent email, Dori argued that the crypto market is potentially in for a long-term demand shock, not short-term speculative flows.

This follows significant regulatory progress, specifically in the US, which has made launching a crypto exchange-traded fund (ETF) easier, boosting structurally higher participation from institutional allocators.

Per Dori, “this shift is part of the broader ‘debasement trade’.” Institutions are reallocating into scarce, non-dilutive assets, such as the world’s number one crypto, Bitcoin.

Moreover, the ETF demand is “steadily absorbing circulating supply,” and large banks, including Bank of America and Morgan Stanley, are expanding “access to spot Bitcoin ETFs amid rising sovereign debt and persistent inflation uncertainty.”

Cryptonews.com discussed this noteworthy shift with Dori in more detail. Our interview is below.

CN: Could you expand on your opinion that the ETFs are in for a long-term demand shock?

As was so amply demonstrated in the first round of historic Bitcoin ETFs, great demand has a strong multiplier effect, with every $1 of demand leading up to $20 or $30 in additional market capitalisation as liquidity dries up.

As new money enters the market, the finite supply forces a rapid escalation in price. This upward pressure is expected to intensify as early inflows are absorbed, leaving even less Bitcoin available for subsequent demand. That’s what we mean by “demand shock” – when the amount of money coming into the market exceeds the supply available for sale, the price is shocked to the upside.

The liquid supply has over the last months been torn in two directions – on the one side, the emergence of new acquisition vehicles such as (Micro)Strategy, Twenty One Capital, and others and the advancing institutional adoption has reduced liquid supply, while on the other side a tendency of very long-term holders to sell parts of their exposure during the latest bull run contributed to an increasing liquid supply.

Overall, the significant reduction in Bitcoin balances on-exchange, however, evidences that liquid supply is declining considerably, according to CryptoQuant, from around 1.5 million BTC in the first half of 2025 to around 1.1 million BTC by the end of the year.

CN: You’ve argued that “sustained ETF demand could influence price discovery through 2026.” Could you tell us more?

As noted above, ETFs have a strong multiplier effect in any case. What makes this even more significant is how the pace and scale of adoption are changing. Traditionally, financial institutions tend to move slowly due to long investment cycles, complex internal approval processes, and the requirement to adjust operational and risk management procedures compliantly.

With recent regulatory developments, including lower barriers to launching crypto ETFs, we’re seeing participation from institutional allocators at a much faster and higher rate than previous, more tactical inflows.

This is likely to have a significant effect on price discovery, as the market adjusts to uncharted territory.

CN: What does this mean for the market?

Bloomberg forecasts anywhere from $15 billion to $40 billion in capital flows during 2026 – and this is likely to be nearer the higher end if, as expected, the US Federal Reserve lowers interest rates this year. Should the CLARITY Act pass the US Senate, capital flows should further accelerate.

Given the multiplier effect mentioned above, we can expect strong momentum in the crypto market. Of course, this is only one among a number of factors that move the needle.

Looking more widely, crypto ETF flows have historically correlated positively with market performance. Strong markets attract inflows and net creations, while drawdowns trigger redemptions. Meanwhile, there’s ample evidence that Bitcoin ETF holders provide long-term support – just witness, for example, how they held strong during the last drawdown.

With various factors that have historically been supportive for crypto assets – such as an acceleration of the business cycle, improving liquidity conditions or solid on-chain activities, for example – and both institutional and sovereign adoption advancing, we would overall expect a growth trajectory for allocations into crypto-based ETFs in 2026.

CN: Do you expect the demand to continue at this level in the near- and mid-term?

There are, of course, many variables, including macro indicators such as inflation and labour market figures that can and will affect demand. But much also depends on the Clarity Act.

If and when this passes, we would certainly expect new filings to continue beyond BTC and ETH, with increased demand for staking yields further driving demand, and rule-based index or basket products may emerge as a new frontier.

It’s important to remember, however, that the underlying tokens must fulfil market liquidity, trading, custody, surveillance and other conditions to ensure this demand is sustainable in the long term.

CN: What may affect demand?

Demand increase can arise from a large variety of sources. State and local governments seeking reserve assets, allocations from large institutional investors, and potentially corporate treasuries are all expected to contribute to the cumulative net demand that fuels this multiplier effect, in a stampede.

For future indicators, it’s crucial to look beyond the underlying crypto. For example, the stablecoin market cap is a powerful proxy signal, with rises typically indicating that more funds are being funnelled into the crypto market.

CN: What major factors could be at play here? How would it reflect on the market?

We entered 2026 amid significant geopolitical uncertainty, which highlights how difficult it is to anticipate the wide range of global political risks that could influence markets. Even identified geopolitical flashpoints have the potential to disrupt demand and investor sentiment in ways that are hard to predict.

On the economy front, AI will again be one of the defining factors, potentially pulling in a number of directions: from the downwards pressures exerted by (potentially) falling labour demands or, as some predict, a major market crash, to the upside from increasing integration of AI with crypto, bringing with it a new wave of utility and therefore value.