Spot Bitcoin ETFs continue to grow in popularity, strengthening their grip on the limited supply of the leading crypto. A recent analysis predicts that these financial instruments will hold more than 10% of the 21 million Bitcoins available by the third quarter of 2024. This prospect raises concerns about possible tensions on supply which could cause prices to rise sharply. price.
The Inexorable Rise of Bitcoin ETFs
Today, existing spot Bitcoin ETFs already represent over 4% of the total BTC supply. However, this share is expected to increase rapidly over the coming months. Indeed, these instruments continue to attract investors, attracted by simplified and regulated access to Bitcoin. In addition, their stock exchange listing allows for easy transactions, boosting their adoption.
However, the analysis highlights that this projection relies on the rejection of requests for Ether spot ETFs in the United States. In other words, if an ETF tied to the second-largest crypto was approved soon, it could reduce the appetite for Bitcoin ETFs. Such a scenario would indeed offer a new crypto exposure option for investors.
The Ether factor nevertheless represents a double-edged sword. On the one hand, the deflationary nature of Ether, unlike Bitcoin, could make it more attractive. But on the other hand, the absence of an Ether ETF should focus institutional demand on Bitcoin in the short term.
A supply crisis in sight?
At any rate, the analysis anticipates that the growing demand for existing Bitcoin ETFs, combined with the capped supply of Bitcoin, could lead to a full-blown supply crisis. In this scenario, BTC prices would skyrocket, well beyond current levels of around $72,000. This outlook echoes the warnings of some seasoned investors like Michael Saylor. The latter has repeatedly emphasized that the limited supply of Bitcoin will inexorably lead to shortages as institutional demand intensifies. Analysts believe that the critical threshold of 10% of supply held by Bitcoin ETFs could be the trigger for widespread embrace.
However, such predictions remain questionable in the unpredictable world of cryptos. Nonetheless, adoption by Bitcoin ETFs appears well entrenched and is likely to continue if no major regulatory shocks occur. Investors will in any case closely monitor this possible supply crisis over the coming months. Meanwhile, Ether’s recent rise above $4,000 is starting to bring some color back to this asset as well. However, the crypto remains far from its all-time highs. Its potential for future appreciation is fueling speculation about a possible cash ETF by the end of 2024.
Ultimately, this crypto analysis highlights the growing momentum of Bitcoin ETFs, which could lead to unprecedented tensions on the supply of the main cryptocurrency in the near future. If these predictions come true, the mass adoption of Bitcoin will likely reach a new milestone.
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