Yesterday, it was a record day for BlackRock’s ETF on Bitcoin.
Indeed, not only has the iShares Bitcoin Trust (IBIT) set its new all-time record in terms of daily trading volumes, but it has also acquired more than 12,000 BTC.
BlackRock’s Bitcoin purchases
IBIT now owns more than 183,000 BTC.
Until yesterday, the day with the most purchases was February 28th, when they exceeded 10,000.
Already the day after the stock market debut on January 11, they had acquired more than 2,600, rising to 8,800 the following day.
So from the beginning BlackRock’s ETF on Bitcoin had started buying large amounts of BTC.
Moreover, at the same time the Grayscale ETF, GBTC, was selling it in large quantities, so it’s as if investors were moving from GBTC to IBIT, since the former has triple the commission costs compared to the latter.
However, if before January 17th GBTC was only liquidating a few thousand per day, starting from that date it began to increase the pace of sales significantly, first rising above 10,000 per day and then even peaking above 15,000.
At that time IBIT was buying between 4,000 and 8,000 a day, so many fewer than those sold by GBTC. However, it should not be forgotten that there were also other ETFs buying them, first and foremost FBTC by Fidelity.
The turning point came already in mid-February, when GBTC had dropped below 2,000 BTC sold per day while IBIT had risen for the first time above 10,000.
Since then, excluding the end of February, the pace of IBIT purchases has remained very high, although the peak occurred only yesterday.
The distribution of BTC
At this moment, IBIT owns 183,000 BTC, while GBTC still owns 415,000, which is more than double.
It should be added that FBTC has reached a holding of 110,000, so IBIT and FBTC alone hold a quantity of Bitcoin equal to 70% of those of GBTC. At this rate, in a few weeks the overtaking could happen.
It will be more difficult for IBIT alone to own more Bitcoin than GBTC, although at this moment this hypothesis seems likely in the medium/long term.
ARKB by Ark and 21Shares is in fourth place among ETFs with 36,000 BTC.
It is estimated that funds such as ETFs and ETNs currently hold almost 950,000 Bitcoins, of which just under half are held in Grayscale’s ETF. However, on January 10th, GBTC alone held over 70% of all BTC held by all ETFs in the world.
At this moment the first three ETFs, GBTC, IBIT and FBTC, collectively hold 708,000 of the 950,000 BTC held by all similar funds in the world, almost three quarters.
Note that Satoshi Nakamoto alone owns more than one million of them, although he has probably never used them because he is dead.
To give you an idea of the scale, after Satoshi and GBTC, the third largest single holder of Bitcoin in the world is the US government, which has about 215,000 in its treasury thanks to seizures.
However, in a few weeks, or even a few days, this step could be surpassed by IBIT from BlackRock.
Even MicroStrategy, with its 193,000 BTC, will soon be surpassed by IBIT.
The impact on the price of Bitcoin
It should be noted that the increase in BTC held by ETFs has an impact on the price of Bitcoin.
The price of Bitcoin is in fact determined on crypto exchanges crypto, where BTC spot is traded.
However, since the number of existing BTC is practically fixed, as they increase by only 900 units per day and with the halving in April they will increase by only 450 units per day, even if ETFs do not buy them on the spot markets, they effectively withdraw them from the market.
Indeed, it seems that OTC desks on which ETFs source Bitcoin are now running out of BTC, so they have no choice but to go get them on the spot markets.
It is no coincidence that since the arrival of Bitcoin spot ETFs on US exchanges, the known BTC reserves of crypto exchanges have dropped from 2.1 million to 1.65 million units. The majority of this decrease occurred in the last few days, with the peak of outflows occurring just yesterday.
So now since at least the end of January, ETFs have been draining Bitcoin from crypto exchanges, effectively reducing the selling pressure on those markets where the price is determined.
The increase in value of the last month is therefore easily explained by this dynamic, which may not even end soon.