- Inflows into Bitcoin ETFs continue to accelerate, now significantly outpacing outflows from Grayscale Bitcoin Trust.
- The majority of inflows are concentrated in two products – managed by BlackRock and Fidelity.
- The financial institutions now hold over 200K BTC between them, likely causing supply available on exchanges to fall further.
The impact of the Securities and Exchange Commission’s approval of the spot ETF is causing waves across the crypto industry, with much of this rally attributed to new money flowing into the sector. While it took a few weeks for the effect to be felt, there’s no denying it now – institutional interest in BTC is at an all-time high. The price of Bitcoin has jumped above USD $52K (AUD $79.7K), and with supply dwindling, some in the community are bullish that the run is only just beginning.
Financial Giants Dominating ETF Scene
BlackRock’s IBIT was always going to be the biggest player once ETFs were approved. They are the biggest asset managers in the world, after all. However, their astronomically low fees paired with name recognition have catapulted their product to one of the most highly-traded products on the market. To put it in context – last week, there was USD $2.4B worth of inflows into crypto ETF products. Of this figure, USD $1.6B went into BlackRock’s product (and USD $600M into Fidelity). Once you zoom out, every other spot Bitcoin fund on the market is an afterthought at this point in time.
Thanks to the massive surge in demand over the past fortnight, BlackRock and Fidelity have been buying up a significant amount of BTC to match fund inflows. This has resulted in the duo owning a combined 203,609 BTC for the sole purpose of backing their spot funds. It won’t be long before BlackRock owns more BTC than MicroStrategy, which will present a major milestone for the industry.
With Bitcoin already ticking past its lowest exchange supply in years, it’s likely the continued buying power of BlackRock and Fidelity will see liquidity and supply dry up a little. The result of this squeeze – alongside an upcoming halving – will likely play out over the next year or two.
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