The ETFs are selling more Bitcoin than those that have been mined.... Everything okay?
During the early hours of Tuesday, February 13th, Bitcoin's price surged past the crucial $50,000 mark, primarily propelled by an unprecedented influx of investments into Bitcoin Spot ETFs. These ETFs managed to accumulate ten times more Bitcoin (BTC) than what miners extracted on Monday, February 12th.
Specifically, data from February 12th indicates that approximately $493.4 million, equivalent to around 10,280 BTC, flowed into Bitcoin Spot ETFs. Among these funds, BlackRock's IBIT emerged as the leader, attracting a staggering $374.7 million in investments. Fidelity's FBTC followed closely behind with a notable influx of $151.9 million, while Ark 21Shares' ARKB secured the third position with $40 million. Alongside these significant inflows, minor outflows were also recorded. Grayscale lost $95 million, and Invesco's BTCO lost $20.8 million, resulting in a net investment influx into Bitcoin Spot ETFs of nearly half a billion dollars.
In contrast, according to Blockchain.com data, on the same day, Bitcoin miners produced only about 1,059 BTC, equivalent to approximately $51 million. This represents only 10% of the BTC quantity accumulated by Bitcoin Spot ETFs. A similar trend was observed on February 9th, with Spot ETFs accumulating around 12,700 BTC, valued at a staggering $541.5 million, while mining contributed just 980 BTC, valued at around $45 million.
BlackRock and Fidelity Lead ETF Inflows The ranking of Bitcoin Spot ETFs, in terms of inflows, is dominated by BlackRock with a total of $250.7 million in investments as of February 9th. Fidelity follows in second place with an influx of $188.4 million, while the combined ETF from Ark 21Shares ranks third after recording substantial inflows of $136.5 million. Grayscale outflows dropped to the lowest level of the week, amounting to $51.8 million, resulting in an overall positive day for inflows.
In a recent interview on CNBC's Squawk Box, Bitcoin pioneer Anthony Pompliano highlighted Wall Street's growing interest in the leading cryptocurrency, noting that Bitcoin's demand is 12.5 times higher than its daily production. Additionally, Pompliano noted that about 80% of Bitcoin's total supply has remained stagnant over the last six months, with only approximately $200 billion worth of BTC actively tradable. Consequently, Bitcoin Spot ETFs managed to accumulate 5% of the entire tradable Bitcoin supply in just 30 days, demonstrating immense appetite for the king of cryptocurrencies.
Bitcoin Spot ETFs See Trading Volume Surge Last week, Bitcoin Spot ETFs witnessed their total daily trading volume surpassing $1 billion, with BlackRock emerging as the top performer. Furthermore, BlackRock and Fidelity's Bitcoin Spot ETFs ranked among the top 10 funds with the highest inflows in January. BlackRock's IBIT secured the eighth position with an estimated $2.6 billion in net flows, while FBTC claimed the tenth position, attracting $2.2 billion in net flows.
In contrast, the Grayscale Bitcoin Trust (GBTC) recorded significant outflows, with an estimated $5.7 billion exiting the fund in January, marking the second-highest outflow among ETFs. However, during the trading period from January 26th to February 2nd, inflows into new Bitcoin Spot ETFs exceeded outflows from GBTC, which on February 2nd recorded its second-lowest outflow day at $144.6 million. Currently, Bitcoin's price hovers around the $50,000 mark, with an increase of over 4% in the last day.
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I'd love to see a calculation (although I'm admittedly far too lazy and technically incompetent to do it) to add up the number of bitcoin held by exchanges in their own treasuries, plus in customer accounts at exchanges, plus BTC in non-exchange wallets, dormant wallets/lost keys, ETF's etc.
Then see if that balances with the number that have been mined so far. Just to make sure there aren't any which are being double-counted somewhere along the line (for example, exchanges nominally holding them in customer accounts, but maybe not buying in enough BTC to cover it - a kind of crypto fractional reserve banking).
That's a good point. Blockchain is transparent and I guess that some sort of such calculation has already been made.
I can try to look for it. If I will find something, you will see a post about it ;)
Very interesting article, I have a question: the SEC has endorsed ETFs as long as they have an underlying, if more than the mined BTC have been traded what do they use as a backup?
Are we sure that then it doesn't happen like algorithmic stablecoins? Earth/Moon was the example of this....
Thanks Eros for your comment and question.
It's true. Selling more Bitcoin than the mined ones can be a temporary scenario that can change in the coming future.
Anyway, when the underlying asset would become lower than the volume of ETF available, well, that can become something close to CFDs
Yay! 🤗
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