TL;DR
- Bitcoin ETFs see massive inflows: Spot Bitcoin Exchange-Traded Funds (ETFs) have attracted nearly half a billion dollars in the past week, indicating a strong appetite for Bitcoin among institutional investors.
- Bitcoin ETFs devour more BTC than miners can produce: The amount of Bitcoin being purchased by spot ETFs is outstripping the rate at which new Bitcoins are being mined, creating a supply and demand imbalance that pushes up the price of Bitcoin.
- Bitcoin ETFs accumulate 5% of tradable supply in 30 days: Spot ETFs have been able to acquire 5% of the entire Bitcoin supply that is actively traded in the market in just one month, showing the growing acceptance of Bitcoin in mainstream finance.
The demand for Bitcoin ETFs has skyrocketed, devouring ten times more Bitcoin (BTC) than what miners can produce. This frenzy underscores the growing appetite for Bitcoin among institutional investors and the widening acceptance of cryptocurrency in mainstream finance.
Bitcoin ETFs, or Exchange-Traded Funds, have become a popular investment vehicle for those looking to gain exposure to Bitcoin without owning the underlying asset. These funds purchase Bitcoin and issue shares that represent a proportional interest in the pooled Bitcoin.
The recent surge in demand for Bitcoin ETFs has led to an interesting dynamic. The amount of Bitcoin being scooped up by these funds is outpacing the rate at which new Bitcoins are being mined. This imbalance between supply and demand has put upward pressure on the price of Bitcoin, which recently hit a high of $50,300 early today, before retracting back to around $49,000.
According to recent data, spot Bitcoin Exchange-Traded Funds (ETFs) saw an influx of approximately $493.4 million, or about 10,280 Bitcoin (BTC), as of February 12. Among these ETFs, BlackRock’s IBIT fund was the most popular, drawing in a substantial $374.7 million. It was closely followed by Fidelity’s FBTC fund, which attracted $151.9 million, and Ark 21Shares’ ARKB fund, which garnered $40 million.
However, there were also minor outflows from certain funds. Grayscale saw an outflow of $95 million, and Invesco’s BTCO experienced an outflow of $20.8 million. Despite these outflows, the net inflow was nearly half a billion dollars.
The Supply and Demand Imbalance Between Bitcoin ETFs and Mining
Interestingly, the amount of Bitcoin produced by miners on the same day was only approximately 1,059 BTC, equivalent to about $51 million, according to data from Blockchain.com. This is only 10% of the amount accumulated by spot ETFs.
A similar pattern was observed on February 9th. On that day, spot ETFs acquired approximately 12,700 BTC, valued at an impressive $541.5 million. In contrast, mining only contributed around 980 BTC, worth approximately $45 million.
In a recent appearance on CNBC’s Squawk Box, Anthony Pompliano, a well-known Bitcoin advocate, underscored the increasing interest in Bitcoin among Wall Street investors. He pointed out that the demand for Bitcoin is currently 12.5 times higher than its daily production.
Pompliano also observed that about 80% of the total Bitcoin supply has remained untouched for the past six months, with only approximately $200 billion worth of Bitcoin being actively traded. Consequently, spot ETFs have been able to amass 5% of the entire tradable Bitcoin supply in a mere 30 days, demonstrating the significant demand for the cryptocurrency.
