Bitcoin ETFs Absorb 10X More BTC Than Miners Can Produce, Fueling Institutional Demand

by Feb 13, 2024CryptoNews0 comments

Bitcoin exchange-traded funds (ETFs) have been attracting a staggering amount of Bitcoin (BTC), surpassing the production capacity of miners by a factor of 10. In just two trading days, spot Bitcoin ETFs have accumulated over $493.4 million, equivalent to approximately 10,280 BTC. The largest share of these inflows went to BlackRock’s iShares Bitcoin Trust, which received a massive $374.7 million. Fidelity’s Wise Origin Bitcoin Fund also saw substantial inflows of $151.9 million, followed by Ark 21Shares Bitcoin ETF with $40 million. Despite some outflows from Grayscale and the Invesco Galaxy ETF, net inflows to spot ETFs reached nearly half a billion dollars.

This trend of Bitcoin ETFs outpacing mining production was also observed on February 9, with approximately $541.5 million worth of Bitcoin flowing into ETFs compared to $45 million added through mining. BlackRock led the way on that day as well, with an inflow of $250.7 million, while Fidelity followed with $188.4 million. Ark 21Shares also experienced significant inflows of $136.5 million. These substantial inflows highlight the strong demand for Bitcoin among institutional investors, signaling growing interest and confidence in the cryptocurrency.

Anthony Pompliano, a well-known Bitcoin advocate, noted that Wall Street’s love for Bitcoin is evident, with demand exceeding the daily production by a factor of 12.5. He emphasized that approximately 80% of the total Bitcoin supply has remained stagnant over the past six months, with only around $200 billion in BTC available for trading. With these ETFs absorbing 5% of the entire tradable supply of Bitcoin within just 30 days, Pompliano believes the march toward a new all-time high for Bitcoin is underway.

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The significant inflows into Bitcoin ETFs and the growing demand from institutional investors reflect the increasing recognition of Bitcoin as a store of value and an investment asset. As more institutional players enter the space, the competition for Bitcoin is intensifying, potentially driving the price of the cryptocurrency higher. However, this trend also raises questions about the potential impact on the available supply of Bitcoin and its long-term price dynamics, as ETFs continue to absorb a substantial portion of the newly minted coins.

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