- Bitcoin ETFs now hold more Bitcoin than Satoshi Nakamoto – a sign of robust demand
- ETF activity has increased significantly this year, pushing the price of BTC up the charts
Spot Bitcoin ETFs have been crucial to demand for the cryptocurrency so far this year. In fact, their accumulation levels have reached new heights in recent months, to the extent that they recently surpassed Satoshi Nakamoto’s holdings.
Spot Bitcoin ETFs in the US reportedly held 1.104 million coins as of December 6. This was higher than the 1.1 million coins at an address belonging to Bitcoin’s Satoshi Nakamoto. This means that US institutions now control most of the BTC in circulation. This was first revealed by Bloomberg’s Eric Balchunas tweeted,
“KING OF THE HILL: America’s Spot ETFs Just Passed Satoshi in Total Bitcoins, Now Owning Over 1.1 Million, More Than Anyone in the World, and They’re Not Even a Year Old Yet, Literally Babies . Astounding.”
This development is a testament to the robust institutional demand across the market. And yet this outcome has not been without criticism. Jonas Schnellia former Bitcoin developer criticized this milestone, describing it as a sign of centralization.
Concerns about centralization in the crypto market stem from control issues. If too much of Bitcoin is controlled by centralized entities, this paves the way for a 51% attack. However, current institutional holdings represent only about 5.5% of the total circulating supply.
The current institutional holdings are also spread across multiple companies operating Bitcoin ETFs. On the contrary, it may not necessarily be a matter of centralization, but of concentration.
A milestone for the institutional adoption of Bitcoin
The fact that ETFs now hold the lion’s share of BTC investments is a testament to the extent to which Bitcoin is attractive to the institutional class. A look at cumulative Bitcoin spot flows reveals the true scale of ETF demand for the asset in 2024.
Source: Farside.co.ke
According to the same information, cumulative spot market flows doubled from early August to December – reflecting the aggressive demand that followed due to a combination of factors. These could double further due to the upcoming pro-crypto administration in the United States and falling interest rates.
The increase in institutional demand in the first year of ETF approval suggests that sentiment has weighed heavily in the asset’s favor. It could also set the pace for increased demand in the coming years.
Another potential impact is that this strong demand could prompt other countries to follow suit with their own ETF approvals. Countries such as Japan, China, Russia and South Korea, among others, have shown interest in Bitcoin so far.
This outcome underlines a 180 degree shift in perception, especially many governments were against Bitcoin not so long ago. In other words, Bitcoin’s adoption trend could grow exponentially in the future.