Demand for spot bitcoin ETFs within the US rose considerably on Tuesday, outpacing new provide created every day by miners by a outstanding 614%, in response to Gayatri Chowdhury, quantitative analysis analyst at Bitwise Asset Administration.
Demand from US BTC ETFs exceeds new provide of BTC by 7x pic.twitter.com/OCU5D19rpf
– Gayatri (@GayatriPC_) March 27, 2024
The rise in demand for Bitcoin ETFs displays the rising curiosity amongst institutional and retail buyers in gaining publicity to digital property, with out having to handle Bitcoin themselves. ETFs present a handy and controlled means for buyers to take part within the potential upside of Bitcoin worth actions whereas mitigating among the dangers related to direct possession and custody.
The Bitcoin halving, scheduled to happen in lower than a month, will scale back the block reward from 6.25 BTC to three.125 BTC. This occasion is vital as a result of it reduces the speed of creation of latest bitcoins by half, making bitcoins rarer over time. As demand for Bitcoin ETFs continues to rise and outstrip new provide, obtainable Bitcoin out there has turn into more and more scarce.
The mix of rising demand for Bitcoin ETFs and the approaching Bitcoin halving have been the catalysts for the rise within the worth of Bitcoin this 12 months, with the worth of Bitcoin now up greater than 55% year-to-date on the time of writing. Since BlackRock initially filed its spot software for a Bitcoin ETF with the SEC, BTC has risen greater than 173%.
Market individuals are nonetheless eager to see how Bitcoin will react to the upcoming halving, as that is the primary market cycle in Bitcoin historical past the place its worth reached a brand new all-time excessive earlier than the halving. Traditionally, it will probably take just a few months for a “provide shock” to begin the worth of Bitcoin rising after a halving. However now, with demand from Bitcoin ETFs surging without end, Bitcoin has already seen a significant provide shock, and the brand new provide of BTC every day is about to halve.