Key Points
Record Levels of Bitcoin Holdings
The total quantity of Bitcoin (BTC) held in digital asset holdings such as trusts, ETFs, and funds has reached an all-time high. This surge reflects the growing institutional interest in this coveted cryptocurrency.
Data from Bytetree reveals that nearly 950,000 BTCs are currently held in these investment vehicles. This surpasses the levels observed during the peak of the 2021 bull market.
Surge in Inflows
The inflows have accelerated in recent months, driven by the excitement surrounding spot Bitcoin ETFs in the U.S. market. Daily capital infusion began to soar around November of last year.
Following the approval of spot ETFs last month, there was a notable dip, intensified by outflows from the Grayscale Bitcoin Trust (GBTC). However, these outflows significantly diminished in February, leading to a steady rise in daily inflows. On February 25th, more than 107K Bitcoins were added to funds, marking the highest inflow since March 2021.
As more Bitcoins are added to these funds and become immobile, this already scarce asset will become even scarcer. With high demand, this supply/demand dynamic could potentially force a price appreciation, solidifying Bitcoin’s status as a store of value asset.
This viewpoint is shared by renowned on-chain analyst, ted. He stated, “Bitcoin demand currently outpaces new supply by more than three-fold… If this persists there’s only one way for price, and that is UP!”
Recent data shows a significant increase in Bitcoin withdrawals from centralized exchanges. CryptoQuant data shows more days of net outflows than net inflows in February. This trend coincides with the rally that pushed Bitcoin’s price above $50,000, suggesting that users were accumulating in anticipation of further price increases.
According to the latest reading of the Bitcoin Fear and Greed Index, the dominant market sentiment is one of greed. This suggests a continuation of the accumulation trend and the potential for a breakout over $52,000.
