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Bitcoin Exchange-Traded Products Now Hold 1 in 12 of Every Available BTC

Last Updated May 28, 2024 6:15 PM
Eddie Mitchell
Last Updated May 28, 2024 6:15 PM
Key Takeaways
  • U.S. spot Bitcoin ETFs hold the largest share in the world, with over 855k BTC across 11 funds.
  • Globally, 21 other Bitcoin exchange-traded products (ETPs) hold over 146k BTC.
  • The number of self-custody Bitcoin wallets being created has slowed down considerably.

Research has found that Bitcoin ETPs now hold over 1 million BTC tokens, or approximately 5% of its 19.7 million circulating supply.

When you account for 7.8 million BTC tokens presumed lost  or in long HODL, the circulating supply is 11.9 million BTC, meaning that ETPs hold around 8.3% of the total Bitcoin in existence, or nearly one in every 12 available Bitcoins.

Institutions Dominate Bitcoin

According to data from HODL15Capital , institutional investors are hoovering up as much BTC as possible. Furthermore, U.S. spot BTC exchange-traded funds (ETFs) account for the significant majority of that figure.

Chart showing total Spot Bitcoin ETPs holdings.
(Source: HODL15Capital)

As of May 24, 2024, U.S. spot ETFs have accumulated 855,619 BTC tokens, averaging 6,200 BTC a day. When combined with 21 other BTC ETPs, this number stands at 1,002,343 BTC tokens.

In August 2023, Glassnode data  estimated 7.8 million of the circulating 19.7 million BTC tokens to be lost or HODLed for the long term.

Just a month after they launched, U.S. BTC ETFs were outpacing Bitcoin miners. In February 2024, it was found that demand for BTC ETFs was 10 times higher than miners’ output at the time. In March, data suggested that approximately 4% of the Bitcoin supply was held in ETFs.

Bitcoin’s scarcity has risen exponentially due to institutional demand, and this has been magnified further by the supply shock following Bitcoin’s fourth halving, which has seen mining rewards reduced to 3.125 BTC per block.

Self-Custody Slowing

In a separate post, HOLD15Capital asked if Bitcoin ETFs were stifling the growth of BTC held in self-custody wallets.

According to data from LookIntoBitcoin , just over 1 million BTC wallets hold 1 BTC or more. Furthermore, the number of new BTC  addresses is in a steep decline.

Chart showing Bitcoin price against number of new Bitcoin wallets.
(Source: LookIntoBitcoin)

This has also seen a drop in the number of daily active addresses, suggesting that retail investors are moving their attention away from Bitcoin and perhaps to other cryptos.

Centralization Risk?

Bitcoin ETP issuers will buy up as much BTC as they possibly can to remain competitive and liquid, especially in the U.S. – though does this mean BTC’s supply will inevitably become centralized to the institutions?

Bitcoin was designed to be decentralized from the outright. However, the consolidation of tokens into ETPs is a departure from its core philosophy.

Whilst ETFs and other ETPs bring Bitcoin to a wider audience, it also diminishes Bitcoin’s decentralized appeal. Considering the rapid growth of U.S. ETFs Bitcoin ownership in just over four months, they could soon command over 10% of Bitcoin’s circulating supply.

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