TL;DR
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The $7.4B invested by ETFs over Jan/Feb, makes up ~6% of the present provide obtainable on the market, and has helped push the BTC value from $44k to $67k to this point in 2024.
Full Story
Questioning how Bitcoin (and by proxy, the remainder of the crypto market) is nonetheless climbing? Similar!
Trigger — positive, the Bitcoin ETFs have wolfed up ~$7.4B of BTC to this point…
However Bitcoin is valued at $1.3T in whole proper now, and $7.4B price of funding is a drop within the ocean by comparability.
So how does that work?
A straightforward parallel is actual property:
If there are extra consumers than there are sellers, house costs will go up.
If there are much less consumers than there are sellers, house costs will go down.
“What is that this, beginner hour? You assume I don’t already know that!?”
— you, most likely.
True! However right here’s the difficult half…
Whereas Bitcoin has a price of $1.3T proper now, little or no of that’s truly obtainable on the market on public exchanges.
There’s about 1.8M BTC (~$122B) on exchanges as of this writing (which doesn’t assure they’re up on the market — it simply means they can be bought).
So at first look, that $7.4B funding right into a $1.3T asset is…what? A purchase order of 0.56% of the whole provide? That’s not sufficient to maneuver the needle.
However the factor is — the value doesn’t react to the share of whole provide being purchased, however obtainable provide.
The $7.4B invested by the BTC ETFs over Jan/Feb, makes up ~6% of the present obtainable provide, and has helped push the value from $44k to $67k.
Now, right here’s the kicker!
If the ETFs proceed to purchase at the same price for the remaining 10 months of 2024, that’d result in 60% of the present obtainable provide being passed by the top of the yr.
(And provide crunches = value run ups).