Bitcoin News Today: Institutional Custody Tightens, Locking Bitcoin Into Long-Term Fortresses

Spot Bitcoin ETFs have experienced a surge in inflows, reinforcing institutional demand for Bitcoin (BTC-USD) and pushing the price back above $111,000. The total assets under management in Bitcoin ETFs now stand at $141.75 billion, with BlackRock’s iShares Bitcoin Trust (IBIT) holding 746,810 BTC and Fidelity’s FBTC holding nearly 199,500 BTC. Together, U.S.-based ETFs account for 1.29 million BTC, or approximately 7% of the circulating supply, highlighting the growing institutional ownership of the cryptocurrency [1].

Institutional custody expansion has further tightened Bitcoin's supply on exchanges. Anchorage Digital and Galaxy Digital reported record institutional custody levels, with Galaxy safeguarding over $1.8 billion in Bitcoin. Traditional financial institutions, including BNY Mellon, are also expanding their digital custody services, which analysts suggest limits Bitcoin's availability for trading and enhances its appeal as a long-term strategic asset. This reduced liquidity environment has historically amplified price increases, particularly when ETF inflows and whale accumulation coincide [1].

Spot Bitcoin ETFs attracted $524 million in net inflows in the week ending August 30, with BlackRock’s IBIT leading the way with $247.94 million, followed by Ark’s ARKB with $78.59 million and Bitwise’s BITB with $46.21 million. For the year-to-date, ETF inflows have exceeded $18.7 billion, with ETF holdings increasing by 170,000 BTC in 2025. However, the low turnover ratio of 0.0299 indicates that a significant portion of these inflows are locking coins into long-term storage rather than circulating in active markets [1].

In contrast, Ethereum-based ETFs have seen a more challenging performance. Despite $3.9 billion in August inflows, Ethereum ETFs have struggled with a notable negative YTD performance, with funds like iShares Ethereum Trust (ETHA) and Fidelity Ethereum ETF (FETH) recording a decline of over 32%. This highlights a capital reallocation trend, but does not detract from Bitcoin’s structural demand driven by ETFs. Ethereum ETFs, launched in July 2024, offer similar exposure to the cryptocurrency but face challenges in tracking accuracy and additional roll costs [3].

Whale accumulation further supports Bitcoin’s upward trajectory. On-chain data reveals that new whale cohorts have accumulated 218,000 BTC since March, with some addresses rotating large amounts between BTC and ETH. Despite this, the broader whale positioning continues to favor Bitcoin accumulation. With September historically marking one of the weakest months for Bitcoin, the resilience of whale and ETF demand could help BTC-USD maintain its current price level into Q4 [1].

Federal Reserve policy remains a critical factor influencing Bitcoin’s price. The U.S. M2 money supply has reached a record $22.1 trillion, and markets expect a 25 bps rate cut in September. Historically, falling interest rates combined with increasing M2 liquidity have driven Bitcoin rallies, as capital shifts from yield-based assets to hard-cap alternatives. While the 2019 rate cut triggered a “sell the news” pullback, the 2024 ETF inflows turned the same policy shift into a sustained rally. The upcoming rate cut could reinforce this bullish trend for BTC-USD [1].

Bitcoin ETFs have become a key driver of institutional adoption and liquidity, with their continued growth reinforcing the cryptocurrency's scarcity and long-term value proposition. If current trends persist, ETF holdings could surpass 2 million BTC by 2027, capturing an even greater portion of the fixed supply. This growth highlights the evolving role of institutional investors in shaping Bitcoin’s market dynamics, even as volatility and regulatory risks remain present [1].

Source:

[1] Bitcoin ETF Inflows Push BTC-USD to $111K as ETF Holdings Reach 1.47M Coins (https://www.tradingnews.com/news/bitcoin-etf-inflows-push-btc-usd-to-111k-usd-with-1-47m-coins)

[2] What Is a Bitcoin ETF? (https://finst.com/en/learn/articles/what-is-a-bitcoin-etf)

[3] Best Ethereum ETFs: Top Funds for Buying Ethereum (https://www.bankrate.com/investing/best-ethereum-etfs/)