In under a year since the launch of Bitcoin Exchange-Traded Funds (ETFs), these financial products have quietly accumulated approximately 5% of the total Bitcoin supply. Despite the significant accumulation, Bitcoin’s price has remained relatively stable, raising questions about the actual impact of ETFs on the cryptocurrency market.
ETFs Steadily Accumulate Bitcoin
According to Doctor Profit on the X Platform, Bitcoin ETFs have been acquiring notable amounts of BTC. These funds have already secured a 5% share of the total Bitcoin supply in less than 10 months, an impressive feat. A major factor behind this accumulation is the method of acquisition. ETFs often purchase Bitcoin through over-the-counter (OTC) desks, rather than public exchanges. This discreet approach allows ETFs to buy large quantities of Bitcoin without immediately impacting the market price.
OTC purchases happen privately between two parties, bypassing public exchanges where retail traders buy and sell Bitcoin. As a result, even though ETFs are acquiring substantial amounts of Bitcoin, the market remains stable, with minimal volatility caused by these purchases. This phenomenon explains why, despite ETFs holding such a significant share of Bitcoin, there has been no noticeable price spike.
Analysts Expect Continued ETF Accumulation
Market analysts believe that this ETF-driven accumulation of Bitcoin is just beginning. Projections suggest that in the coming months, Bitcoin ETFs could hold between 15% and 20% of the total supply. This continued accumulation is likely to have a deeper effect on the market in the long run.
Recent data from SoSoValue reveals that Bitcoin ETFs recorded a daily net inflow of $494.27 million, contributing to a cumulative net inflow of $18.80 billion as of September 27. Currently, total net assets held by Bitcoin ETFs are valued at $61.21 billion, representing about 4.71% of Bitcoin’s overall market capitalization.
BlackRock’s IBIT and Grayscale’s GBTC are two key players driving the ETF accumulation. IBIT currently holds $24.04 billion in net assets, accounting for 1.85% of the total Bitcoin supply. Grayscale’s GBTC, meanwhile, has $14.53 billion in assets. Both funds have shown steady price growth, with IBIT registering a 1.49% daily price change and GBTC seeing a similar 1.49% increase.
Most Bitcoin ETFs are seeing daily gains between 1.39% and 1.57%, signaling consistent growth. These figures underscore the growing interest from institutional investors in Bitcoin ETFs as a long-term investment vehicle.
Also Read: Bitcoin’s Best September Since 2013: Is a 60% October Rally on the Horizon?
The Long-Term Impact on Bitcoin Prices
Despite the significant ETF accumulation, Bitcoin’s price has been largely unaffected in the short term. However, experts argue that the long-term effects of these ETFs may become more pronounced as their holdings grow. With ETFs projected to hold up to 20% of the total supply, the potential for price stability or even long-term price appreciation becomes more likely.
In conclusion, Bitcoin ETFs are steadily becoming a significant force in the crypto market. While their current accumulation hasn’t led to dramatic price shifts, their growing influence could shape Bitcoin’s price trajectory in the months and years to come. As more institutional investors flock to Bitcoin through ETFs, the market may see a new era of stability, with the possibility of future gains.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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