The Bitcoin landscape changed when the SEC approved Spot Bitcoin ETFs on January 11, 2024. This decision opened the floodgates for institutional investors to enter the Bitcoin market through a more regulated and accessible channel.
This significant accumulation by ETFs has not only contributed to Bitcoin’s price stability but also solidified its status as a legitimate investment asset. Institutional investors, who were previously hesitant, have found ETFs to be a safer and more regulated way to engage with Bitcoin, further driving adoption.
Bitcoin ETF Holdings
There are 10 Spot Bitcoin ETFs listed currently apart from Grayscale Bitcoin ETFs. Among them, Blackrock, Fidelity, Bitwise, Ark, and VanEck are the major spot Bitcoin ETFs that have added the most Bitcoin to their AUM.
As of August 22, 2024, Bitcoin ETFs hold approximately 918,520 BTC, which represents nearly 4.65% of the total circulating supply of Bitcoin (as per on-chain holdings data by theblock.co). There are days when ETFs bought a billion-dollar worth of Bitcoin in a single day. While these are inflows, there are outflows too. ETFs also sell Bitcoin sometimes. It is too early for them to sell their Bitcoin though. The biggest outflow in a single day was when ETFs sold a total of $563 million.
Most of the outflows right now are from Grayscale Bitcoin Trust. They had 617,380 bitcoins on the day the ETFs were launched. We will get back to Grayscale in a bit.
Top 5 Bitcoin ETFs
Blackrock's iShares Bitcoin Trust (IBIT)
Blackrock's iShares Bitcoin Trust IBIT has poured in $20.7 billion into Bitcoin. They have accumulated 345,850 Bitcoins so far. It is currently worth $21.47 billion (Bitcoin price at the time of writing this article is $63,990). Blackrock already owns 1.7% of the Bitcoin circulating supply. The biggest single-day inflow of IBIT was $849 million and the biggest single-day outflow was $36.9 million. On average, they have bought $132.7 million worth of Bitcoin every day.
Blackrock's CEO, Larry Fink advocates about Bitcoin now and is pretty bullish about Bitcoin.
Wise Origin Bitcoin Trust (FBTC)
Wise Origin Bitcoin Trust by Fidelity has spent $9.8 billion. They have 196,910 bitcoins in their wallet. They hold their own Bitcoin, unlike others who trust a custodian like Coinbase to hold their Bitcoin. Fidelity has spent a maximum of $473 million in a single day. And had the highest outflow of $191 million in a single day. On average, they are buying bitcoins worth $63.4 million daily.
Ark/21 Shares Bitcoin Trust (ARKB)
Ark/21 Shares is the issuer of Ark/21 Shares Bitcoin Trust. It is the third-largest Bitcoin ETF. They have bought bitcoins worth $2.5 billion. 47,530 is their current Bitcoin balance. $200 million is the most they spent on a single day for Bitcoin. And they have sold $99.9 million worth of Bitcoin on some day and it is their highest outflow so far.
Bitwise Bitcoin ETP (BITB)
Bitwise's ETF put $2 billion in Bitcoin so far. Their maximum inflow in a single day was $237 million and the maximum outflow in a single day was about $70 million. They own about 36,900 bitcoins currently.
VanEck Bitcoin Trust (HODL)
HODL is the ticker for VanEck's Bitcoin ETF. They hodl 10,970 bitcoins at this point. $118 million was their highest inflow in a single day. And the maximum they were was about $38 million worth.
Valkyrie Bitcoin Fund (BRRR)
Valkyrie Bitcoin Fund bought 6,360 bitcoins so far. They put $530 million till now. On their good day, they did a buying of $43 million and on another day they did sold a maximum of $20 million. Their ticker is BRRR, it represents the meme where FED Chairman Powell uses a printer to print USD.
What is GrayScale Bitcoin Trust(GBTC)?
Grayscale Bitcoin Trust held a total of 621,390 on the day Bitcoin ETFs were first approved. They sold $19.7 billion worth of Bitcoin since January this year. Almost as much Blackrock bought. Wait, what? How did they? But they are selling their Bitcoin after all other ETFs came into the picture. Let's go into some detail.
Grayscale Bitcoin Trust or GBTC was started in September 2013, way before ETFs were launched. It is a Bitcoin trust that holds Bitcoin as an underlying asset just like any other ETF. They have issued a limited number of shares and those shares have some price which fluctuates with the price of Bitcoin. The share price could be trading at a discount or at a premium to the nominal value.
There were no alternatives other than GBTC for investors before other ETFs were approved. The GBTC had a fee of 1.5% while the recently launched ETFs have a fee of around 0.2%. So, there were massive redemptions in this fund and the trust had to sell their Bitcoin. They sold $642 million worth of Bitcoin, which is the maximum they sold in a single day.
Conclusion
The price of Bitcoin was $46,632 on January 11,2024, which is the day ETFs were launched. The price is $63,990 at the time of writing this article. After millions of dollars worth of Bitcoin trading by ETFs, and even after big selling by GBTC, effectively the ETFs have put in $17.88 billion in Bitcoin so far. And they continue to accumulate more Bitcoin every day.
Looking ahead, the growth of Bitcoin ETFs is expected to continue, with more funds entering the market and existing ones increasing their holdings. Potential regulatory developments could also influence this trajectory, either by opening up more opportunities for ETF expansion or by imposing new restrictions.
In conclusion, the rise of Bitcoin ETFs marks a critical juncture in the evolution of the cryptocurrency market. As ETFs continue to accumulate more Bitcoin, their influence on the market is likely to grow, making them a key component of Bitcoin’s future.
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