US-listed Bitcoin ETFs Acquire 21,030 BTC This Week, Surpassing New Supply by 570%

US-listed spot Bitcoin ETFs have acquired 21,030 BTC this week, significantly surpassing the newly mined 3,150 BTC. This activity includes major players such as BlackRock and Fidelity, further bolstering market dynamics. BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund led the acquisitions, contributing to the 21,030 BTC purchased. This sharp contrast to the 3,150 BTC mined highlights a significant push in institutional demand. Industry leaders, including Nate Geraci, emphasized the profound impact of these inflows, indicating record levels nearing $50 billion.

BTC's price surged to $107,400 due to the increased demand, which substantially offsets the week's new supply. This scenario accentuates potential price pressures and heightened market volatility. Historical data indicate that when ETF inflows considerably outstrip the asset production rate, as seen in digital and traditional markets, asset prices typically rise. This suggests a potential rally for BTC prices, propelled by institutional activities and demand patterns.

BTC markets face a potential supply squeeze, impacting liquidity and exerting upward price pressure. BlackRock and Fidelity remain pivotal, leveraging their financial heft to shape the crypto asset landscape. Institutional moves may embolden similar trends in other crypto sectors. In recent weeks, the demand for Bitcoin through US spot ETFs has surged, with institutional buyers absorbing a significant portion of the new supply. Over the past three weeks, US-listed Bitcoin spot ETFs have seen net inflows exceeding $4.63 billion, indicating a strong return of institutional interest. This influx of capital has been particularly notable, with over $3.2 billion in inflows recorded over the past two weeks without any outflow days, suggesting a robust and sustained demand.

The inflows into Bitcoin ETFs have been driven by various factors, including the anticipation of a supply shock from the upcoming halving event in 2024. Samson Mow had previously warned of a double-edged market pressure: a supply shock from the halving and a demand shock from ETF buying. This view has gained traction as institutional investors continue to pour money into Bitcoin ETFs, absorbing a significant portion of the new supply. The total liquidity flowing into Bitcoin ETFs during the week amounted to approximately $2.2 billion, with BlackRock's iShares Bitcoin ETF (IBIT) playing a significant role. IBIT has seen net inflows crossing $52 billion, with assets under management shooting past $72 billion. This surge in inflows has been largely driven by the recovery in the market, as well as the growing interest from institutional investors.

The impact of these inflows is evident in the market dynamics. Over the last year, Bitcoin ETF purchases have been three times higher than the network's new supply. This disparity highlights the significant demand from institutional buyers, who are increasingly viewing Bitcoin as a valuable addition to their portfolios. The sustained inflows into Bitcoin ETFs have also contributed to the overall market sentiment, with Bitcoin's dominance surpassing 54% in recent weeks. The robust demand for Bitcoin ETFs has also led to a situation where the total assets held by US spot Bitcoin ETFs have surpassed $125 billion, representing over 6% of the total Bitcoin supply. This significant holding by ETFs underscores the growing institutional interest in Bitcoin and its potential as a store of value. The continued absorption of new supply by institutional buyers is likely to have a lasting impact on the market, potentially leading to further price appreciation and increased adoption.