Bitcoin ETF

Bitcoin

when

Spot

James

Spot Bitcoin Exchange-Traded Funds (ETFs) saw yet another record-breaking day yesterday, with inflows reaching a new daily all-time high (ATH). This surge in investment comes at a time when Coinbase, the leading US crypto exchange and custodian for eight of the ten spot ETFs, reports its BTC reserves at their lowest since 2015, signaling a potential supply shock in the near future. 
<h2 id="bitcoin-etfs-continue-to-smash-records">Bitcoin ETFs Continue To Smash Records</h2> 
James Seyffart, a Bloomberg ETF analyst, provided a detailed <a href="https://twitter.com/JSeyff/status/1763069374867427767" target="_blank" rel="noopener nofollow">update</a> on the record day, February 28, stating, “UPDATE: We have a new record inflow for the Cointucky Derby Bitcoin ETFs! [BlackRock’s] IBIT took in a record $612 million on its own. On a net basis, the group took in $673 million. This beats the day 1 record of $655 million. (still waiting on BTCO) Also, IBIT crossed $9 billion in assets.” 
<img loading="lazy" decoding="async" class="wp-image-284310 size-full" src="https://bitcoinist.com/wp-content/uploads/2024/02/GHetSQmWoAA_rFb.png?resize=755%2C276" alt="Bitcoin ETF flows" width="755" height="276" srcset="https://bitcoinist.com/wp-content/uploads/2024/02/GHetSQmWoAA_rFb.png?resize=755%2C276?w=755 755w, https://bitcoinist.com/wp-content/uploads/2024/02/GHetSQmWoAA_rFb.png?resize=755%2C276?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/02/GHetSQmWoAA_rFb.png?resize=755%2C276?w=750 750w" sizes="(max-width: 755px) 100vw, 755px" data-recalc-dims="1"> 
The data shared by Seyffart further illustrates the competitive dynamics within the Bitcoin ETF space. While BlackRock’s IBIT led the charge with substantial inflows, Grayscale faced re-accelerating outflows, totaling $216 million yesterday. In contrast, Fidelity’s FBTC ETF recorded an impressive inflow of $245 million. 
WhalePanda, a noted figure in the crypto community, <a href="https://twitter.com/WhalePanda/status/1763071025556717955" target="_blank" rel="noopener nofollow">provided</a> insight into the day’s events, emphasizing the scale of BlackRock’s inflows and the expected volatility in the market. “We had an insane $676.8 million of inflows […]. Fidelity is going to hit $5 billion inflows either today or tomorrow, with Blackrock well on its way to $10 billion.” 
He added, “The supply is super thin up here, so expect more violent moves to both sides from here on. Once we hit ATH it wouldn’t surprise me to see $10k moves to either side in a day,” cautioning investors against complacency in the bullish market. 
Eric Balchunas, another Bloomberg analyst, <a href="https://twitter.com/EricBalchunas/status/1762954053808472145" target="_blank" rel="noopener nofollow">highlighted</a> the trading volume associated with these inflows, noting, “RIDIC: the New Nine doubled their volume record (set Monday) with just about $6b traded […] IBIT led with $3.3b of it, Fidelity did $1.4b (both double their previous records).” 
Balchunas’s comments shed light on the sheer market activity driven by these ETFs, surpassing previous benchmarks and indicating a massive demand for Bitcoin investment vehicles. Notably, this is organic, as per Balchunas. “I asked around to some mkt makers and most say this volume is largely a function of natural demand vs algo/arb type volume. Word is wirehouse platforms are seriously looking at adding them soon. I’m sure pressure is mounting for them.” 
<h2 id="bitcoin-supply-shock-incoming">Bitcoin Supply Shock Incoming</h2> 
Mason Jappa, CEO and founder of Blockware, contextualized the inflows within the broader market dynamics, particularly focusing on the decreasing BTC <a href="https://bitcoinist.com/bitcoin-supply-exchanges-falls-6-4-lowest-feb-2018/" target="_blank" rel="noopener ">supply on exchanges</a> like Coinbase. 
“Coinbase’s current Bitcoin supply continues to trend downwards (this is the lowest their BTC supply has been since 2015). This paired with the halving coming up paints a very interesting supply shock being realized as we speak,” Jappa noted. This trend is critical, as reduced supply on exchanges, coupled with increasing demand, could precipitate significant price movements. 
<img loading="lazy" decoding="async" class="size-full wp-image-284312" src="https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462" alt="Coinbase's Bitcoin reserves" width="1024" height="462" srcset="https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462?w=1280 1280w, https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/02/GGzuZpQWEAAY-QC.jpg?resize=1024%2C462?w=1140 1140w" sizes="(max-width: 1000px) 100vw, 1000px" data-recalc-dims="1"> 
Coinbase’s role as the custodian for major Bitcoin ETFs, including <a href="https://bitcoinist.com/blackrock-private-bitcoin-event/" target="_blank" rel="noopener ">BlackRock</a>‘s iShares Bitcoin Trust (IBIT), ARK 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF (BITB), as well as Grayscale (GBTC), adds a layer of strategic importance to the exchange’s reserve levels. 
The recent correlation between <a href="https://bitcoinist.com/bitcoin-sellers-returned-coinbase-price-decline/" target="_blank" rel="noopener ">Coinbase’s spot premium</a> and Bitcoin’s price movements suggests that as ETFs continue to draw on the exchange’s reserves, the market may witness tighter supply and heightened price volatility. Remarkably, with the <a href="https://bitcoinist.com/bitcoin-halving-supply-shock-significant-heres-why/" target="_blank" rel="noopener ">halving</a> on the horizon and exchange reserves dwindling, the market is potentially on the cusp of a significant supply shock. 
At press time, BTC traded at $62,487. 
<img loading="lazy" decoding="async" class="size-full wp-image-284313" src="https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472" alt="Bitcoin price" width="1024" height="472" srcset="https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=3628 3628w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=1536 1536w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=2048 2048w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=1140 1140w, https://bitcoinist.com/wp-content/uploads/2024/02/BTCUSD_2024-02-29_11-43-37.png?resize=1024%2C472?w=3000 3000w" sizes="(max-width: 1000px) 100vw, 1000px" data-recalc-dims="1">

Bitcoin ETFs See New ATH Inflows As Coinbase Reserves Hit 2015 Low

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