Spot Bitcoin exchange-traded funds (ETFs) have recently made headlines by acquiring significantly more Bitcoin than is being mined. In the past week alone, these ETFs purchased 6,573 BTC, a substantial amount compared to the 3,150 BTC mined during the same period. This imbalance is intensifying Bitcoin’s already limited supply, further enhancing its rarity.
Bitcoin’s total supply is capped at 21 million coins, with the final coin projected to be mined by the year 2140. Unlike many new cryptocurrencies that suffer from oversupply, Bitcoin remains distinguished by its inherent scarcity.
The surge in demand for Bitcoin is increasingly apparent with the recent approval of Spot Bitcoin ETFs in the U.S., which has attracted both retail investors and large institutions. This growing interest has been reflected in Bitcoin’s price, which rose by 9% over the past week, reaching $64,518. As of now, Bitcoin is trading at $64,022.38, supported by a trading volume of $25.85 billion and a market capitalization of $1.26 trillion. Market analysts predict that the price will continue to rise as ETF issuers continue to purchase more Bitcoin than is being mined.
Eric Balchunas, a Bloomberg analyst, suggests that major ETF issuers, such as BlackRock, could significantly increase their Bitcoin holdings, potentially reaching three times their current reserves by the end of next year. This anticipated surge in purchases is driven by the fact that ETF issuers are required to buy corresponding amounts of Bitcoin when investors buy shares in these funds, thereby tightening the supply-demand dynamic.
Given that institutional investors often need up to a year for thorough risk assessments, these ETFs are expected to attract more capital in the near future. This sustained demand could lead to further notable shifts in Bitcoin’s price landscape.
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