What does Bitcoin ETF have in store for us this week? New record in sight if Grayscale doesn't come and spoil the party?
Bitcoin – Demand vs Supply
Last week, ETFs swallowed a net 7,376 bitcoins. Or 120% of the bitcoins that were created by miners at the same time.
Grayscale's GBTC ETF spoiled the party again with outflows representing 10,867 bitcoins. Note also that the ARK Capital ETF has, for the first time, suffered net weekly outflows equivalent to 1,154 bitcoins.
Overall, BlackRock is still in the lead with 264,000 BTC held on behalf of its clients. That is to say 1.35% of all bitcoins in circulation, or almost 19 billions of dollars.
Fidelity is second with 150,000 BTC (~$11 billion). Ark completes the podium with 43,000 BTC.
Unfortunately, outflows from the GBTC ETF are currently preventing us from reaching $100,000. The following chart is a mirroring of the amounts of BTC held by Grayscale (red) and BlackRock (green).
This near-perfect symmetry suggests that a good portion of the BTC in the GBTC ETF is flowing directly into the BlackRock ETF. As a reminder, Grayscale charges management fees more than 6 times higher than those of BlackRock, hence the exodus of its clients.
In short, it is not impossible that a good part of Blackrock's bitcoins mainly come from a transfer from the GBTC ETF. If so, net inflows into the ETFs are unlikely to make a dramatic jump once the GBTC ETF is empty.
Here's a rough summary of supply and demand since the ETF launched on January 10 based on on-chain movements.
Offer :
-78,300 BTC mined.
-296,500 BTC sold by the GBTC ETF.
-189,402 BTC sold by different entities.
Request :
-519,500 BTC purchased by ETFs.
-25,096 purchased by Microstrategy, Michael Saylor's firm.
-19,606 BTC purchased by “Mr. 100”.
Knowing that the supply from the rewards distributed to each block will decrease by half from the halving scheduled for April 19. This supply shock should help bitcoin find its cruising speed towards new highs.
Indeed, most miners sell their entire bitcoin production. In February, if the heavyweights sold almost nothing (Riot, Cleanspark, Hive, Marathon), eight of the fourteen major North American miners sold 100%, or more, of their harvest.
Currently, BlackRock's BTC purchases more than offset all bitcoins mined at any given time. Post halving, it is even the equivalent of twice the natural supply of BTC that its ETF will swallow.
Knowing that according to the order book of the Coinbase exchange, the selling pressure is only 1,000 bitcoins between the current price and 75,000 dollars for one bitcoin:
In the absence of significant outflows from the GBTC ETF, things could settle down over the coming days or weeks. Especially since Chinese ETFs are arriving…
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