In October, spot Bitcoin exchange-traded funds (ETFs) experienced record inflows, with a total of more than $3 billion.
Spot Bitcoin exchange-traded funds (ETFs) are currently experiencing their most successful month since their inception in January 2024, with inflows exceeding $3 billion thus far in October.
This increase in demand has resulted in ETF issuers purchasing Bitcoin at a rate that significantly exceeds the newly mined supply.
According to data from HODL15Capital, the 11 spot Bitcoin ETFs acquired a combined 15,194 BTC during the trading week of October 21-25, which is nearly five times the 3,150 BTC mined during the same period. The robust demand that has driven unprecedented levels of BTC acquisition by ETF issuers was evident in the approximately $1.83 billion in inflows that occurred this week.
“The ETFs have acquired any Bitcoin that you sold today, this week, or this year.” HODL15Capital wrote, “Weak hands willingly sell their BTC day after day, week after week, despite the fact that demand for U.S. Bitcoin ETFs far exceeds new supply.”
These issuers have collectively acquired 45,557 BTC since early October. Since the sanction of spot ETFs on January 10, 2024, this is the fourth-highest month for BTC acquisitions.
In the interim, the combined BTC holdings of ETF issuers have nearly reached one million BTC as a result of aggressive purchasing. The Bitcoin ETF issuers collectively held 977,122 BTC as of October 25, which is only 22,878 BTC short of the million-BTC threshold. BlackRock maintains the greatest BTC reserve, accounting for nearly 2% of the total Bitcoin supply, with an estimated 403,714 BTC.
It is important to note that the combined holdings of the ETFs could soon surpass those of Satoshi Nakamoto, the pseudonymous creator of the top asset, if the present accumulation rate persists.
Eric Balchunas, an analyst at Bloomberg ETFs, stated that the ETFs are 97% of the way to holding 1 million BTC and 87% of the way to surpassing Satoshi as the largest. The ETFs are not yet 10 months old.
Market observers have noted that the ETF issuers’ influence on market liquidity and price stability is expected to increase as they now possess a significant portion of BTC’s supply.
In fact, the volatility risk may be elevated during periods of high inflows or outflows as the ETFs continue to accumulate the top asset, particularly due to the relatively constant supply of BTC. Analysts warn that this concentration may result in heightened price sensitivity in response to market dynamics.
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