Percentage of Bitcoin Supply Backing ETF Surges by 30% in the Last 3 Months

Bitcoin ETFs have been popular since the US Securities and Exchange Commission approved them. With their growth, the percentage of Bitcoin backing them has also risen. According to Stocklytics.com, the Bitcoin supply backing ETFs has increased by 30% in the last three months.

Edith Reads, a financial expert from Stocklytics, commented:

The remarkable surge in the percentage of Bitcoin supply backing ETFs over the last three months is impressive. The allure of Bitcoin ETFs lies in their regulatory oversight, liquidity, and accessibility, which address many institutional investors’ concerns regarding direct cryptocurrency investments.

Stocklytics financial expert, Edith Reads

Reasons Behind the Surge?

The bitcoin supply backing the ETF has been rising steadily. As of January 31st, it was 3.27% of the entire 21 million Bitcoins. Fast-forward three months to April 30th, and this figure has risen to 4.21%. According to Dune, the net flow of the Bitcoin ETF since launch is $12 billion.

Several factors have led to the surge in Bitcoin supply backing ETFs. Most mainstream financial institutions widely accept Bitcoin as an authentic asset class. Such recognition has endeared digital assets to investors willing to invest more. 

Moreover, the approval of the Bitcoin ETF, especially in the US, made investors confident, as there was regulatory clarity.

Currently, the world is battling inflation and geopolitical tensions. These have led investors to seek alternative stores of value, with Bitcoin topping the table as hedging against financial loss. Additionally, the maturation of cryptocurrency infrastructure, including improved custody solutions and trading platforms, has facilitated greater accessibility and ease of investment in Bitcoin ETFs.

Implications for the Cryptocurrency Market

The escalation in the percentage of Bitcoin supply backing ETFs reverberates across the entire crypto market, marking a positive development for enthusiasts of the leading cryptocurrency. This surge signifies several crucial aspects. Firstly, it mirrors the increasing institutional acceptance and integration of Bitcoin into traditional investment portfolios, lending it greater legitimacy in the eyes of previously hesitant investors. With institutional adoption on the rise, the prospect of a more stable and liquid Bitcoin market looms.

Moreover, the proliferation of Bitcoin ETFs could broaden the crypto investor base. By enabling investors to sidestep direct ownership of digital assets, ETFs offer a convenient avenue for those wary of the risks of holding Bitcoin outright. This democratization of access is pivotal in fostering higher adoption rates and stimulating growth within the crypto market, thereby exerting upward pressure on prices.