Spot Bitcoin ETFs in the U.S. are buying Bitcoin faster than it’s being mined, creating a unique situation in the market. These exchange-traded funds, which directly invest in Bitcoin, have been popular among investors since their launch in January 2024. In October alone, U.S. Bitcoin ETFs have brought in more than $3 billion, making it one of their best months so far. This growing demand has led ETF issuers to buy more Bitcoin than is currently being mined each week, causing a significant impact on the cryptocurrency’s supply.
During the trading week from October 21 to 25, spot Bitcoin ETFs bought a combined 15,194 BTC. Meanwhile, miners were able to produce only 3,150 BTC in that period. This shows how the demand from Bitcoin ETFs is now much greater than the new Bitcoin supply coming into the market. According to data from HODL15Capital, inflows from ETFs during that week totaled around $1.83 billion. This level of demand has led ETF issuers to acquire Bitcoin at an unprecedented rate, causing a surge in their holdings.
In October 2024, spot Bitcoin ETFs in the U.S. collectively purchased 45,557 BTC, making this the fourth-highest month for Bitcoin acquisitions by ETFs since they were first approved. With these ongoing purchases, ETF issuers now hold nearly one million BTC, representing a large portion of Bitcoin’s total supply. As of October 25, the combined holdings of Bitcoin ETFs reached 977,122 BTC, just 22,878 BTC away from crossing the one-million BTC mark. BlackRock, the world’s largest asset manager, holds about 403,714 BTC, which is almost 2% of Bitcoin’s total supply. This places BlackRock as the leading Bitcoin holder among ETFs.
The rapid accumulation of Bitcoin by ETFs has caught the attention of market analysts, who believe it could significantly impact Bitcoin’s market behavior. If this accumulation rate continues, ETF holdings might soon surpass the amount of Bitcoin held by Satoshi Nakamoto, Bitcoin’s creator. Satoshi, who mined the earliest Bitcoins and helped launch the network, is estimated to have around one million BTC. According to Bloomberg ETF analyst Eric Balchunas, the ETFs are already 97% of the way to holding one million BTC, and they are 87% of the way to surpassing Satoshi’s holdings. This development signals a shift in the Bitcoin market, as institutional players like BlackRock become some of the largest Bitcoin holders.
The growing influence of ETFs on Bitcoin’s supply raises questions about what this means for the cryptocurrency’s price and market stability. Since Bitcoin’s total supply is fixed at 21 million, the limited availability makes the market more sensitive to large purchases. The more Bitcoin these ETFs hold, the more they could impact the price whenever they buy or sell. Some analysts think that the concentration of Bitcoin among ETFs could lead to higher price volatility. In times of heavy buying, prices could rise sharply, while significant selling could cause prices to drop suddenly. This effect would be particularly noticeable because of Bitcoin’s limited supply.
Market experts also highlight that as ETFs continue to gather more Bitcoin, they gain more control over Bitcoin’s liquidity. Liquidity refers to how easily an asset can be bought or sold without affecting its price. A liquid market usually has a large supply available for trading, which keeps prices stable. However, if a few large holders control most of the Bitcoin, they could unintentionally cause bigger price swings. This makes the Bitcoin market more prone to sudden changes in price when ETFs decide to buy more or sell some of their holdings.
Many investors view spot Bitcoin ETFs as a secure and regulated way to invest in Bitcoin, which explains the high demand. These ETFs track the price of Bitcoin directly, unlike futures ETFs that rely on contracts to predict future Bitcoin prices. Because spot ETFs hold actual Bitcoin rather than contracts, they have a more direct effect on the market. As demand for these funds increases, ETF issuers have to buy more Bitcoin, which in turn reduces the supply available for other buyers and can push the price up. Some believe that this strong demand for spot Bitcoin ETFs will continue as more investors turn to them as a way to gain exposure to Bitcoin without having to buy or store it themselves.
Analysts predict that this trend of high Bitcoin accumulation by ETFs might continue, especially as more investors become interested in Bitcoin. With the high demand from spot Bitcoin ETFs, there is also a risk of potential price swings during times of rapid inflows or outflows. If large amounts of Bitcoin are bought or sold suddenly, the market could react with noticeable price shifts. This is because Bitcoin’s fixed supply limits how much new Bitcoin can enter the market at any time, making it sensitive to big changes in demand. As a result, the ETFs’ growing share of the Bitcoin supply could make the market more responsive to sudden buying or selling activities by these funds.
Aside from BlackRock, other ETF issuers are also amassing substantial Bitcoin reserves. Together, these funds hold a significant percentage of Bitcoin’s total supply, and their combined holdings are approaching historical levels. The influence of these ETFs on the Bitcoin market is likely to grow as they continue to gather more Bitcoin. Some analysts believe that, in the long term, this concentration of Bitcoin in ETFs could lead to changes in how Bitcoin’s price is set, as these funds become major players in the market.
If ETFs eventually hold more Bitcoin than Satoshi Nakamoto, it would mark a symbolic shift in the history of Bitcoin. Originally, Bitcoin was mined and held by individuals and small investors. Now, large financial institutions are taking a leading role in Bitcoin ownership. This shift has both supporters and critics. Some argue that institutional involvement can bring stability and legitimacy to Bitcoin, making it more acceptable in mainstream finance. Others worry that it goes against Bitcoin’s original vision as a decentralized, peer-to-peer currency that operates outside of traditional financial systems.
The impact of these ETFs on Bitcoin goes beyond just price and supply. By holding a large amount of Bitcoin, ETFs are shaping how the asset is viewed by the public and by financial regulators. As these funds gain more influence, they may also face greater scrutiny from regulators who want to ensure that the market remains fair and stable. Any changes in regulation could affect how ETFs manage their Bitcoin holdings, and in turn, impact the Bitcoin market. Investors and market watchers are keeping a close eye on how this situation develops, as it could lead to new rules or restrictions on Bitcoin ETFs in the future.
The surge in Bitcoin demand from U.S. spot ETFs is creating a new dynamic in the cryptocurrency market. As ETFs continue to buy more Bitcoin than miners can produce, they are becoming major players in the market. With nearly one million BTC already held by these funds, their influence on price and liquidity is growing. While this may bring benefits such as increased interest in Bitcoin, it also raises concerns about potential price volatility and concentration of ownership. As this trend continues, both investors and analysts are watching closely to see how it will shape the future of Bitcoin.
