Bitcoin spot ETFs by the numbers: one month later

2024 kicked off to an exhilarating start, with Bitcoin spot ETF approvals on the horizon and the Cryptocurrency market in a clear uptrend as a result. The debut of these new BTC-backed products, however, resulted in a strong, 20% correction in Bitcoin.

Price retreated, but the companies behind each ETF continued to buy the dip in BTC, substantially increasing their holdings. Now, one month later after the spot Bitcoin ETFs began trading, we’re looking at how much BTC each ETF has accumulated thus far, and how this new demand in the face of limited supply might impact Bitcoin price action in the future.

Bitcoin spot ETFs: sell the news

On January 10, 2024, the US Securities and Exchange Commission approved a slew of spot Bitcoin ETFs for the first time in the United States. The expectation was that inflows would dramatically increase the price of Bitcoin almost instantaneously. But the opposite happened in the near term. BTCUSD suffered a 20% drawdown in January following the ETFs going live.

With the top Cryptocurrency up more than 200% from bear market lows, natural profit-taking combined with Grayscale GBTC redemptions and other factors led to an overdue pullback. Lower prices were attractive for ETF providers, however, who used the entire month to load up on BTC to offer their customers.

ETF holdings one month later

Even with redemptions out of Grayscale, the firm remains the largest holder of BTC in the ETF space, with over 475,000 BTC. BlackRock, meanwhile, for its iShares Bitcoin Trust, has added more than 70,000 BTC.

Fidelity, another major player in traditional finance, has amassed over 60,000 BTC in the same timeframe. Both ARK and Bitwise have added more than 15,000 BTC each. Invesco Galaxy Bitcoin Trust now holds about 7,000 BTC. Across VanEck, Valkyrie, Franklin, and WisdomTree, they hold another roughly 7,000 BTC.

BTC impact by the numbers

All combined, one month later, the new ETF providers (excluding Grayscale) have accumulated more than 174,000 BTC. To put this into perspective, this is nearly 1% — 0.89% to be precise — of the entire circulating supply of Bitcoin.

Furthermore, this is only the first month these products have been trading. As demand increases, these ETF providers will need to buy more BTC to satisfy their customer’s needs. Considering the extremely limited and finite supply of BTC available, there is only so much available to purchase at current prices before they have to bid higher. 

Understanding supply versus demand

Markets are all about supply versus demand. If there is more demand than supply, prices tend to trend upward. If there is more supply than demand, prices will suffer. This ongoing demand while supply is already low could be the catalyst the Crypto market has been waiting for.

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