Wall Street’s big players boost Bitcoin ETF holdings to nearly 4% of supply
Bitcoin exchange-traded funds (ETFs) in the United States, including the recently launched BlackRock’s iShares Bitcoin ETF (IBIT), have amassed nearly 4% of the entire Bitcoin supply, signaling strong institutional interest in the cryptocurrency. As of Friday morning, spot funds held 776,464 BTC, valued at approximately $47.7 billion, out of the 19.64 million BTC in circulation, which is capped at a maximum of 21 million coins to be mined over the next century. Grayscale’s Bitcoin Trust (GBTC) leads the pack of 10 physically-backed funds, despite its share of Bitcoin supply dropping from 3.2% to 2.2% since converting to an ETF and facing competition from lower-fee funds.
The influx of capital into Bitcoin ETFs, particularly the BlackRock’s iShares Bitcoin ETF, which has gathered over $10 billion in assets and more than 161,000 BTC in just seven weeks, underscores the growing mainstream acceptance of Bitcoin as an investment asset. This comes as Bitcoin posts its largest monthly gain in dollar terms, with a near $20,000 increase in February, surpassing the previous record set in October 2021. The surge in Bitcoin’s price has been accompanied by record net inflows into U.S. spot Bitcoin ETFs, with BlackRock’s IBIT dominating the flows.
Other notable Bitcoin holders include MicroStrategy, with 0.98% of the supply, and the U.S. government, believed to control up to 1.1% due to seizures from criminal cases. Approximately 10% of Bitcoin is held on crypto exchanges, slightly more than what is held by miners. The creator of Bitcoin, Satoshi Nakamoto, is estimated to hold between 3% to 5.6% of the circulating supply in dormant addresses. A Chainalysis study from 2020 suggests that around 3.7 million BTC could be lost forever, indicating that 19% of the supply may never be active again. Despite Grayscale’s fund experiencing capital outflows, the collective investments in spot ETFs, excluding GBTC, have seen significant unrealized gains, thanks to Bitcoin’s rally from under $47,000 to more than $61,000.