CoinShares: Bitcoin ETF Demand Surpasses Mining Output Threefold

The daily growth rate of digital gold reserves in spot bitcoin ETFs is 2800 BTC, while supply increases by only 900 BTC. These estimates were provided by CoinShares, as reported by The Block.

The resulting demand shock has further reduced bitcoin balances on centralized exchanges. According to experts’ calculations, the decline from 2020 levels has reached 28%.

“Until recently, the dynamics of the first cryptocurrency were closely linked to expectations of interest rate cuts. Spot ETFs, after their approval, have significantly influenced price trends,” experts explained.

These assertions were well illustrated by events on February 28. On this day, the price of bitcoin surged to $64,000 for the first time since November 2021.

According to Bloomberg analyst James Seyffart, trading volume during the incomplete session reached a record $6.3 billion, described as “disruptive.”

The #Bitcoin ETFs are absolutely demolishing their prior trading volume record from day 1. We’re at $6.28 billion and there’s still 90 minutes left of trading … pic.twitter.com/rH4HIHVtpa

— James Seyffart (@JSeyff) February 28, 2024

Seyffart’s colleague, Eric Balchunas, noted new historical highs in activity for products from BlackRock ($3.34 billion) and Fidelity ($1.44 billion), as well as a doubling of the number of trades in the sector overall.

RIDIC: the New Nine doubled their volume record (set Monday) with just about $6b traded.. $IBIT led w $3.3b of it, Fidelity did $1.4b (both double their prev records). The total number of trades was double too, over half a million individual trades bt them. $IBIT alone > $QQQ. pic.twitter.com/ZzB5PWXA4f

— Eric Balchunas (@EricBalchunas) February 28, 2024

According to Velo Data, the annualized funding rates for perpetual contracts on digital gold on Binance and OKX exceeded 85% — the highest since April 2021.

According to Velo Data, as BTC surges past $60,000, the current annualized funding rates for BTC contracts on Binance and OKX are both over 85%, the highest since early April 2021, subsidizing from long to short. In addition, the annualized funding rate of Binance’s ETH contract…

— Wu Blockchain (@WuBlockchain) February 29, 2024

Amid the rally, Glassnode analysts stated that the dynamics of capital flows, exchange activity, leverage in crypto derivatives, and institutional demand indicate an increased risk appetite among bitcoin investors.

Earlier, a co-founder of Matrixport predicted a 15% correction in digital gold.