{"id":400414,"date":"2024-02-27T13:50:06","date_gmt":"2024-02-27T13:50:06","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=400414"},"modified":"2024-02-28T02:08:54","modified_gmt":"2024-02-28T02:08:54","slug":"is-this-the-bitcoin-supply-squeeze-playing-out-as-predicted","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/is-this-the-bitcoin-supply-squeeze-playing-out-as-predicted\/","title":{"rendered":"Is this the Bitcoin ETF supply squeeze playing out already?"},"content":{"rendered":"<p>Seven days after the new Bitcoin ETFs launched, I analyzed how they could put pressure on Bitcoin's supply dynamics in an article called &#8220;<a href=\"https:\/\/cryptoslate.com\/if-blackrock-continues-6k-btc-daily-buys-we-get-a-supply-crunch-within-18-months-heres-why\/\">If BlackRock continues 6k BTC daily buys, we get a supply crunch within 18 months; here's why<\/a>.' On the day of publication, Jan. 18, Bitcoin closed at $41,248 after falling from a high of $49,000 on Jan. 11. Since then, the flagship digital asset has soared 37% to break $57,000.<\/p>\n<p>While Bitcoin had fallen consistently after the ETF launched, <em>CryptoSlate<\/em> noted the persistent BTC inflows, which, at the time, averaged around 6,266 BTC per day for BlackRock alone. The analysis identified that were such inflows continue, the liquid supply of Bitcoin could be absorbed this year, with the exchange balances or very liquid supplies targetable by mid-2025.<\/p>\n<figure style=\"width: 817px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/01\/Screenshot-2024-01-18-192230.png\" alt=\"Hypothetical Bitcoin supply absorbed by BlackRock\" width=\"817\" height=\"433\" \/><figcaption class=\"wp-caption-text\">Hypothetical Bitcoin supply absorbed by BlackRock<\/figcaption><\/figure>\n<p>As noted at the time, the analysis was purely hypothetical and did not consider the outflows from Grayscale GBTC. Additionally, it only looked at BlackRock, the largest fund's inflows, to simplify the data at that point. The exercise aimed to emphasize the <a href=\"https:\/\/cryptoslate.com\/could-bitcoin-echo-gamestop-with-a-mother-of-all-supply-squeezes-maybe\/\">potential for a supply squeeze<\/a> and the lack of liquid Bitcoin to facilitate persistent ETF pressure on the supply. On Jan. 18, BlackRock had 25,067 BTC under management, valued at $1 billion.<\/p>\n<figure style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/01\/Screenshot-2024-01-18-172010-1024x183.png\" alt=\"BlackRock Bitcoin inflow rate\" width=\"1024\" height=\"183\" \/><figcaption class=\"wp-caption-text\">BlackRock Bitcoin inflow rate<\/figcaption><\/figure>\n<p>Interestingly, while the inflows into BlackRock did not maintain the 6,266 BTC daily average pressure, inflows into the <a href=\"https:\/\/cryptoslate.com\/glossary\/newborn-nine\/\">Newborn Nine<\/a> have surpassed this level. BlackRock currently has 130,231 BTC under management, whereas the fund would have 275,707 BTC if it continued at 6,266 BTC daily. However, on Jan. 18, 6,266 BTC was valued at $258 million, which would now represent an inflow of $357 million, given the dramatic price surge.<\/p>\n<figure id=\"attachment_400436\" aria-describedby=\"caption-attachment-400436\" style=\"width: 2480px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-400436\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46.png\" alt=\"Bitcoin ETF projections at 6k per day\" width=\"2480\" height=\"404\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46.png 2480w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46-300x49.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46-1024x167.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46-768x125.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46-1536x250.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.35.46-2048x334.png 2048w\" sizes=\"(max-width: 2480px) 100vw, 2480px\" \/><figcaption id=\"caption-attachment-400436\" class=\"wp-caption-text\">Bitcoin ETF projections at 6k per day<\/figcaption><\/figure>\n<p>It's important to remember that the spot Bitcoin ETFs are purchased with dollars and denominated in dollars in a brokerage account. Thus, while inflows into the ETF have been consistent in dollar terms, they have been reduced in terms of Bitcoin purchases.<\/p>\n<p>Across the Newborn Nine, <a href=\"https:\/\/twitter.com\/vetlelunde\/status\/1762385285915070750?t=aw6ZR-6aD050XLPVXY8AQA\">303,002 BTC<\/a> is now held under management per K33 Research. Looking at the <em>CryptoSlate<\/em> table used for the Jan. 18 article, this aligns with inflows projected for BlackRock by March 2, 2024.<\/p>\n<figure id=\"attachment_400434\" aria-describedby=\"caption-attachment-400434\" style=\"width: 2504px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-400434 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02.png\" alt=\"BlackRock ETF inflows\" width=\"2504\" height=\"414\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02.png 2504w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02-300x50.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02-1024x169.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02-768x127.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02-1536x254.png 1536w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2024\/02\/Screenshot-2024-02-27-at-13.32.02-2048x339.png 2048w\" sizes=\"(max-width: 2504px) 100vw, 2504px\" \/><figcaption id=\"caption-attachment-400434\" class=\"wp-caption-text\">300k BTC BlackRock ETF inflow projections<\/figcaption><\/figure>\n<p>Using this data, should the Newborn Nine continue to <a href=\"https:\/\/cryptoslate.com\/insights\/gbtc-records-smallest-outflow-of-44-million-since-spot-etf-conversion\/\">absorb Grayscale's declining outflows<\/a> and purchase additional Bitcoin from the broader market at this pace, 1 million BTC could be under management by June. Further, this rate would swallow the BTC equivalent of the entire current liquid supply of Bitcoin (roughly 1.3 million BTC) by September.<\/p>\n<p>On Feb. 8, I discussed the potential for the &#8216;<a href=\"https:\/\/cryptoslate.com\/could-bitcoin-echo-gamestop-with-a-mother-of-all-supply-squeezes-maybe\/\">Mother of all Supply Squeezes<\/a>&#8216; for Bitcoin, which is akin to the GameStop saga but even more effective. The price has surged 29% since that article went live in just 19 days, an average of 0.65% per day. Bitcoin ETFs have continued to buy, and Grayscale's outflows are slowing.<\/p>\n<p>The requirements for a supply squeeze appear to be present; the only question I see is, at what level does the demand become affected by the price? Do Bitcoin ETF purchasers continue to buy if Bitcoin is at $100,000? Well, at that price, BlackRock's IBIT would be around $60 per share. That doesn't sound quite as expensive to <a href=\"https:\/\/cryptoslate.com\/how-growing-us-interest-shaped-bitcoin-price-ahead-of-the-etf\/\">new investors now, does it<\/a>?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Seven days after the new Bitcoin ETFs launched, I analyzed how they could put pressure on Bitcoin&#8217;s supply dynamics in an article called &#8220;If BlackRock continues 6k BTC daily buys, we get a supply crunch within 18 months; here&#8217;s why.&#8217; On the day of publication, Jan. 18, Bitcoin closed at $41,248 after falling from a [&hellip;]<\/p>\n","protected":false},"author":1264,"featured_media":390266,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,78665,77968,36],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - 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