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The second half of 2023 has been marked by increasing debates and positive expectations regarding spot Bitcoin ETFs, despite the fact that since February 5th, 2021, ETFs and funds have recorded the lowest amount of Bitcoin (BTC) held. So, what do the latest data indicate?
Critical Data on Bitcoin!
In particular, CryptoQuant’s “Bitcoin Fund Holdings” metric seems to be slightly related to the BTC price. However, as funds separate from their cryptocurrencies and the price remains stable, a correlation gap that starts to increase may occur. According to the data obtained, as of September 5th, the funds show a total of 685,271 BTC (worth $17.54 billion) held by ETFs. This measurement reached its peak in May 2021 with 740,000 tokens and experienced a significant decline along with the bear market in June 2022.
Since the mentioned time, the amount of Bitcoin Fund Holdings has continuously decreased within a downward trend, despite the BTC price recovery in June 2023. This has created a significant difference between these two measurements, which have had a high correlation in the past two years. Moreover, according to experts, this difference may imply:
The Bitcoin price will decrease in order to meet the amount held by the funds. These assets will enter a new accumulation phase, allowing them to match the positive price performance of BTC.
Institutional Interest in BTC!
Bitcoin Fund Holdings last recorded these low values in early 2021. However, we did not have as many funds and ETFs as we do now before 2021. This year could be the year dominated by high levels of institutional adoption in BTC.
The adoption by financial institutions can also be one of the main demand generators that fueled the bull market in 2021 for the leading cryptocurrency. In order for Bitcoin to be able to review its past price performances with the increasing circulating supply, it needs to constantly find more demand. Additionally, if Bitcoin reaches its all-time high market value from 2021 onwards, BTC may trade at $66,838, which is $2,207 (3.19%) lower than the all-time high price in USD.
