- U.S. Spot Bitcoin ETFs drove a potential supply shock with surging BTC demand.
- Ethereum ETFs closed 2024 strong, signaling a possible shift in investor focus for 2025.
On the 7th of January, I observed Bitcoin [BTC] breaking through the $100,000 barrier yet again, reaching a high of $102,000 before experiencing a sudden bearish reversal. At the time of my last update, this cryptocurrency has seen a decline of 6.21% over the past 24 hours, with its current trading price standing at $95,432.97.
This decrease occurred as apprehension grew about a possible disruption in the supply due to escalating demand for Bitcoin ETFs in the U.S. spot market.
Is Bitcoin ETF posing a risk to Bitcoin?
During the month of December 2024, these ETFs acquired approximately 51,500 Bitcoins – a figure that nearly quadrupled the 13,850 Bitcoins mined within the same timeframe, according to data from Blockchain.com.
Providing further insights on the same, an analyst took to X and noted,
“Demand from ETFs alone was approx 272% more than the amount supplied.”
He added,
“They scooped 3X the nearly 14,000 bitcoins mined in December.”
Anticipating as I am, the burgeoning interest in U.S. Spot Bitcoin Exchange-Traded Funds (ETFs) has fueled my apprehension about an impending Bitcoin supply shortage, a potential event that some analysts foresee happening shortly.
Speaking about this matter, crypto expert Lark Davis expressed a strong cautionary note in December, highlighting the extensive Bitcoin accumulation occurring within these Exchange-Traded Funds (ETFs).
Davis pointed out that over the course of the second week in December, ETFs purchased a staggering amount of 21,423 Bitcoin, whereas miners managed to mine just 3,150 Bitcoin during the same period.
Bitcoin ETF December trends explained
On December 17th, 2024, the combined Bitcoin ETFs from around the world had a staggering 1,311,579 Bitcoins worth approximately $139 billion. This represented about 6.24% of the total Bitcoin supply of 19.8 million, underscoring their substantial impact on the market.
In times of strong bull markets for Bitcoins, it’s possible that these Exchange Traded Funds (ETFs) might hold between 10% and 20% of all existing Bitcoins. This could intensify concerns about a significant disruption in the supply of Bitcoin.
To back up this point, figures from Glassnode indicate that there was a massive surge of approximately $4.63 billion into Spot Bitcoin ETFs last December, which is almost twice the typical monthly average of $2.77 billion for 2024.
It’s worth noting that most of this occurrence took place during the initial part of the month, followed by outflows for the remainder. However, there was a significant surge on December 26th.
Can Ethereum ETF surpass Bitcoin ETF in 2025?
On January 7th, Bitcoin ETF investments saw inflows amounting to $52.4 million – a considerable decrease from the impressive $978.6 million recorded the day prior. On the other hand, Ethereum [ETH] ETFs experienced outflows totaling $86.8 million on that same date, as reported by Farside Investors.
Even though there were challenges, Ethereum Exchange-Traded Funds (ETFs) have demonstrated remarkable strength, ending 2024 with a grand total of $35 billion inflows. This robust growth indicates increasing faith among analysts in Ethereum’s long-term worthiness.
Despite difficulties, Ethereum ETFs have been strong and grew significantly in 2024, showing that people believe more in the long-term value of Ethereum.
As Bitcoin ETFs maintain their high level of market engagement, Ethereum ETFs are gradually catching up and becoming more competitive.
As a forward-thinking crypto investor, I can’t help but notice the persistent trends that seem to be shaping our market. If these tendencies continue, it looks like 2025 could bring a significant change in focus for investors. This shift might elevate Ethereum ETFs as the leading players in the crypto investment scene.
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2025-01-08 15:04