TL;DR

• The $7.4B invested by ETFs over Jan/Feb, makes up ~6% of the current supply available for sale, and has helped push the BTC price from $44k to $67k so far in 2024.

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Wondering how Bitcoin (and by proxy, the rest of the crypto market) is still climbing? Same!

Cause — sure, the Bitcoin ETFs have gobbled up ~$7.4B of BTC so far…

But Bitcoin is valued at $1.3T in total right now, and $7.4B worth of investment is a drop in the ocean by comparison.

So how does that work?

An easy parallel is real estate:

If there are more buyers than there are sellers, home prices will go up.
If there are less buyers than there are sellers, home prices will go down.

“What is this, amateur hour? You think I don’t already know that!?”
— you, probably.

True! But here’s the tricky part…

While Bitcoin has a value of $1.3T right now, very little of that is actually available for sale on public exchanges.

There’s about 1.8M BTC (~$122B) on exchanges as of this writing (which doesn’t guarantee they’re up for sale — it just means they can be sold).

So at first glance, that $7.4B investment into a $1.3T asset is…what? A purchase of 0.56% of the total supply? That’s not enough to move the needle.

But the thing is — the price doesn’t react to the percentage of total supply being bought, but available supply.

The $7.4B invested by the BTC ETFs over Jan/Feb, makes up ~6% of the current available supply, and has helped push the price from $44k to $67k.

Now, here’s the kicker!

If the ETFs continue to buy at a similar rate for the remaining 10 months of 2024, that’d lead to 60% of the current available supply being gone by the end of the year.

(And supply crunches = price run ups).