Bitcoin ETF Impact: Unveiling the Unprecedented Surge in Demand and Predicting a Price Revolution

Bitcoin ETF

BTC Price Surge

Cryptocurrency Market Trends

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Published on

Mar 06, 2024

The impact of the Bitcoin (BTC) Exchange-Traded Fund (ETF) approval on the BTC ecosystem.  In this article, we will explore the direct purchasing impact of Bitcoin from these new ETF’s, how the volume of purchases are directly impacting the price of BTC, how these purchases are impacting supply, and what to look forward to in the future. 

The nine (9) new BTC ETF’s have been purchasing Bitcoin at a furious rate since their approval on January 10, 2024.  Overall, from the approval date to March 01, 2024, the BTC ETF’s have purchased approximately 341k BTC.  These purchases account for approximately $48.1 Billion dollars of BTC and approximately 3.9% of the total outstanding supply of BTC. 

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The next image breaks down the BTC holdings of the 9 ETF’s that have been operating for 51 days compared to other major holders of bitcoin. 

When you continue to break this down, it reveals an even more impressive demand for BTC.  As an example, last week February 26 - March 01 approximately 30,000 bitcoin was purchased via the BTC ETF’s alone.  During this same time period, only 6,160 Bitcoin were mined.  This shows an average of 5x demand higher than supply for bitcoin during this time frame.

As we learned in our last article, bitcoin miners only produce approximately 900 BTC per day.  The demand for BTC from these ETF’s are going up day after day.   For example, on February 28th alone, the demand for bitcoin from the BTC ETF’s was 10x the daily supply of bitcoin.  If this trend continues, exchanges will be exhausted of all available BTC in 3 months. 

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Since the approval of the BTC ETF’s, we have seen unprecedented demand for Bitcoin, and overall, it continues to increase over time.  As the demand increases, the supply is decreasing on exchanges, and on Over The Counter (OTC) exchange desks as well.  According to glassnode, on Friday March 01, 2024 there were only 40 BTC reported available on OTC exchanges.  This is the lowest amount of available OTC BTC since 2019.

The same as OTC Bitcoin, the Bitcoin available on exchanges is also going down as well.  The overall demand for Bitcoin far outweighs the current supply of bitcoin, and the daily/weekly/monthly newly created supply as well.  As seen below, the number of available bitcoin on all exchanges is decreasing dramatically, and the amount of available BTC is at its lowest levels since 2018.  

What does all of this mean?  A free market is driven by supply and demand.  Bitcoin has a fixed total supply of 21,000,000 BTC.  It also has a fixed daily supply of new Bitcoin being introduced to the market at a rate of 900 BTC.  As we learned in the last article, this daily supply will be halved in April to 450 BTC per day.  If the current demand from the BTC ETF’s continues or increases, the price of Bitcoin will continue to rise.  Eventually, the amount of freely flowing BTC on exchanges will diminish to less than 1k BTC available total.  This is when we have a supply shock, and the price of Bitcoin will drive up exponentially.  Soon, if someone wants to purchase Bitcoin, they will need to compete with the ETF companies to get it, which means they will need to pay more than the ETFs are willing to pay as well.

The upcoming BTC halving which typically leads into the next crypto bull cycle is being supercharged by the Bitcoin ETF approvals. Period.  And this has never been seen before. This is why analysts are calling for crazy price predictions for BTC.  Some are calling for $250k, $300k, 500K and even $1m per Bitcoin.  Ultimately, nobody knows exactly what will happen to the price of Bitcoin in the future, but I think it is a solid bet to say the price will go up from here.