TL; DR
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The $7.4 billion invested by ETFs in January/February represents about 6% of the current supply for sale, and has helped push the BTC price from $44,000 to $67,000 so far in 2024.
Full story
I wonder what Bitcoin (and by proxy the rest of the crypto market) is like still to climb? The same!
Because – sure, the Bitcoin ETFs have gobbled up ~$7.4 billion worth of BTC to date…
But Bitcoin is currently valued at $1.3 billion in total, and $7.4 billion in investments is a drop in the bucket in comparison.
So how does that work?
An easy parallel is real estate:
If there are more There are more buyers than sellers and house prices will rise.
If there are fewer There are more buyers than sellers and house prices will fall.
“What is this, amateur hour? You think I don’t know that yet!?”
– you probably.
WHERE! But here’s the tricky part…
Although Bitcoin is currently worth $1.3 trillion, very little of it is actually for sale on public exchanges.
There is about 1.8 million BTC (~$122 billion) on exchanges at the time of writing (which is not the case). Guarantee they are for sale – it just means that they can are sold).
So on the face of it, that $7.4 billion investment in a $1.3 billion asset is…what? A decrease of 0.56% of the total supply? That’s not enough to move the needle.
But the thing is: the price doesn’t respond to the percentage of total offer that is purchased, but available delivery.
The $7.4 billion invested by the BTC ETFs in January/February represents approximately 6% of the current available offer and helped push the price from $44,000 to $67,000.
Now, here’s the kicker!
If ETFs continue to buy at a similar pace through the remaining ten months of 2024, it would result in 60% of the current available supply disappearing by the end of the year.
(And supply crises = price increases).
