The introduction of Bitcoin exchange-traded funds (ETFs) has sparked debate about the long-term outlook for Bitcoin and its supply. Despite having no immediate impact on prices, the approval has triggered a reversal, with institutions offering Bitcoin ETFs to increasingly accumulate digital assets.
BlackRock, the world’s largest asset management company, is also among the participating institutions, raising expectations that increased participation by individual investors in Bitcoin ETFs will contribute to future price increases.
Bitcoin ETF applicants strengthen Bitcoin supply
A recent report states that the 11 Spot Bitcoin ETF applicants collectively hold approximately 3.3% of the current Bitcoin supply.
Recently approved Bitcoin ETF applicants include Grayscale, BlackRock, Fidelity, Franklin Templeton, Invesco, VanEck, WisdomTree, Hashdex, Bitwise, Valkyrie, and BZX.
According to the latest data from Ycharts, there are currently 19.61 million Bitcoins in circulation.
However, there is speculation within the crypto industry about the potential impact of Bitcoin’s halving, scheduled for April, on both price and supply.
This event, which occurs every four years, halves mining rewards, thereby slowing down the rate at which new Bitcoins are created and reducing the overall available supply.
At the time of publication, the price of Bitcoin is $42,062.
read more: What is a Bitcoin ETF?
Bitcoin ETF did not meet initial expectations
On January 10th, the SEC gave the green light to 11 spot Bitcoin ETF applications, raising expectations that a price surge is imminent.
Contrary to speculation, Bitcoin’s value fell by about 10% after approval.
read more: Who will own the most Bitcoin in 2024?
On January 16th, SEC Chairman Gary Gensler expressed cynicism about approving a spot Bitcoin ETF. He believes such financial products go against the principles of Bitcoin and bring centralization to digital assets.
Gensler warned that the decision could exacerbate speculation and further increase volatility in an already volatile market.