Amidst robust Bitcoin ETF inflows, the price of BTC surged to a new two-year high of over $57,000, pushing its market cap past $1.1 trillion. Nine recently launched spot Bitcoin exchange-traded funds (ETFs) have collectively accumulated 300,000 Bitcoin valued at $17 billion since their debut in mid-January, with net inflows exceeding $6 billion.
The holdings of these spot Bitcoin ETFs represent approximately 1.5% of Bitcoin’s total supply of 21 million BTC. Bolstered by increasing demand and limited availability, BTC reached a yearly peak of over $57,000 on February 27th, closing in on its all-time high of nearly $69,000.
These ETFs continued their upward trajectory, witnessing over $500 million in net inflows on February 26th alone, along with a record-breaking trading volume of $2.4 billion. Notably, BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund led in trading volume, indicating strong investor interest in Bitcoin exposure through ETFs.
While spot Bitcoin ETFs enjoy surging inflows, Grayscale’s Bitcoin Trust (GBTC) witnessed a slowdown in outflows, recording its lowest outflow day in recent trading sessions. This shift suggests a growing market preference for spot Bitcoin ETFs over GBTC, despite the latter’s historical dominance in the market.
The consistent net inflows into spot Bitcoin ETFs, coupled with declining outflows from GBTC, underscore the substantial market demand for ETF-based Bitcoin exposure. This trend aligns with the diminishing Bitcoin supply, especially with the upcoming Bitcoin halving, further bolstering bullish sentiment towards BTC prices.
Currently, miners add approximately 900 new BTC to the daily supply, while spot Bitcoin ETFs witness net inflows ranging from 8,000 to 9,000 BTC per trading day. This dynamic of increasing demand and diminishing supply positions BTC for potential price appreciation in the near term.