The introduction of U.S. Bitcoin spot ETFs has caused quite a stir in the market, with net inflows reaching $12.3 billion in just three months. Analysts are closely monitoring the effect of these ETFs on the broader Bitcoin market, especially when compared to existing futures and spot markets through on-chain data analysis.
The Grayscale Bitcoin Trust (GBTC) stands out as the sole new Bitcoin ETF that has experienced significant outflows since January 11. Despite losing around 300,000 BTC, almost half of its total holdings, the fund’s net asset value has only decreased from $28.7 billion to $23.1 billion. This implies the potential for more sell-side pressure from the fund, particularly since most coins are held by older investors who obtained shares at lower costs and may be looking to capitalize on Bitcoin’s price surge.
GBTC is viewed as a long-term holder supply, with investors capitalizing on high prices to offload some of their holdings. This behavior is consistent with past Bitcoin cycles, where investors tend to take profits as the price reaches new all-time highs. Moreover, the distribution of BTC from long-term holders, defined as those holding coins for more than five months, has increased significantly, reaching levels observed during previous bull runs. GBTC now represents approximately one-third of all long-term holder spending in recent months, indicating its influence on the market.
When comparing the net inflows of other Bitcoin ETFs to the change in Bitcoin’s “realized cap” (a measure of capital inflows into the network), it is evident that ETF inflows amount to $28.5 billion, while the overall network recorded $52 billion in capital inflows. This suggests that ETFs constitute around 40% to 50% of the traditional Bitcoin spot market on a volume basis. However, futures trading remains dominant in both sectors, representing 80% to 85% of Bitcoin trading activities on average.
The introduction of U.S. Bitcoin spot ETFs has undoubtedly impacted the broader market, with significant net inflows seen in a short period. The behavior of GBTC and other ETFs in relation to long-term holder supply and trade volume highlights their growing influence in the market. Analysts will continue to monitor these developments closely to assess the full extent of the ETFs’ impact on the future of Bitcoin trading.
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