Spot Bitcoin exchange-traded funds (ETFs) have kept on attracting investor inflows over this past week, with data showing that total inflows reached $91.3 million on April 11, led by BlackRock’s iShares Bitcoin Trust (IBIT), whose total net inflows now top $15 billion.
According to data shared by BitMEX Research, the spot Bitcoin ETF offered by the world’s largest asset manager saw a significant inflow of $192.1 million on April 11, the largest daily inflow since April 5. The fund has average daily inflows of $240.4 million since it was first launched.
Valkyrie’s Bitcoin Strategy ETF (BRRR) also saw positive inflows, receiving $8.4 million on Thursday, marking its largest daily inflow since March 26 and bringing its total net inflows to $467.5 million.
Total spot Bitcoin ETFs inflows were dampened by Grayscale’s GBTC, which experienced a net outflow of $124.9 million, bringing its total net outflows to $16.1 billion. The fund, nevertheless, still holds an astonishing 314,151 BTC as it was already Bitcoin’s largest fund before it was converted into a spot ETF.
BlacRock’s IBIT, in comparison, holds 269,310 BTC after registering significant inflows since launch.
These inflows are coming at a time in which demand for the flagship cryptocurrency is “growing at an unprecedented pace,” at a time in which the supply of Bitcoin held on cryptocurrency exchanges has dwindled to record lows, suggesting a potential supply shock that could drive prices higher could soon occur.
According to Julio Moreno, Head of Research at cryptocurrency analytics firm CryptoQuant, demand for the flagship cryptocurrency “has become more important than supply” and, according to the firm’s data, demand for BTC from permanent holders has for the first time ever outpaced issuance.
Data from CryptoQuant shows that known exchange addresses now hold roughly 1.94 million BTC, a figure that represents a mere 9.8% of Bitcoin’s total circulating supply of around 19.67 million coins.
These exchange reserves have been steadily declining from a peak of 2.85 million BTC seen in July 2021, with the diminishing supply on exchanges suggesting that investors are increasingly taking a long-term holding strategy rather than being actively trading.
It’s worth pointing out that a lower supply on exchanges could lead to a potential supply shock if demand is to suddenly surge. A supply shock occurs when the readily available supply of an asset on exchanges abruptly drops while demand increases.
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