The 1 Nakamoto Milestone: Bitcoin ETFs Now Hold Over 1 Million BTC

$1.05 Billion Net Inflows: Bitcoin ETFs Set the Stage for a Potential Sell-Side Liquidity Crisis
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Bitcoin exchange-traded funds (ETFs) have collectively surpassed 1 million BTC in custody, representing approximately 5% of the total circulating supply of Bitcoin worldwide.

According to data shared by Michael Saylor, the executive chairman of MicroStrategy, on Twitter, more than 30 Bitcoin ETFs now hold 1,002,343 BTC as of May 24, with a current value of around $70.5 billion.

TLDR

Bitcoin exchange-traded funds (ETFs) have collectively surpassed 1 million BTC in custody, representing approximately 5% of the total circulating supply of Bitcoin worldwide.
The majority of these Bitcoin holdings are held within U.S. Bitcoin spot ETFs, with Grayscale Bitcoin Trust and BlackRock’s iShares Bitcoin Trust being the largest funds.
Bitcoin ETFs provide investors with exposure to Bitcoin through a familiar structure, allowing them to include the asset alongside other securities within retirement or tax-advantaged accounts.
US Bitcoin ETFs have experienced ten consecutive trading days of positive inflows, with BlackRock IBIT leading the pack, followed by Fidelity FBTC and VanEck HODL.
The growth of Bitcoin held in ETFs raises questions about whether it is slowing down the growth of Bitcoin held in self-custody.

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The majority of these Bitcoin holdings are held within U.S. Bitcoin spot ETFs, which were launched in January. The largest funds, the Grayscale Bitcoin Trust and BlackRock’s iShares Bitcoin Trust, each hold roughly half of the BTC, with 289,040 BTC and 287,168 BTC, respectively.

Other significant Bitcoin ETFs include the Fidelity Wise Origin Bitcoin Trust (161,538 BTC), the Ark 21Shares Bitcoin ETF (48,444 BTC), and the Bitwise Bitcoin ETF (36,185 BTC).

Internationally, Canada’s Purpose Bitcoin ETF, the first to launch globally, holds 27,110 BTC and remains the largest Bitcoin ETF outside the United States. These ETFs are distributed across several countries, including Sweden, Hong Kong, Germany, Switzerland, Brazil, and Australia.

Bitcoin ETFs provide investors with exposure to Bitcoin through the familiar ETF structure, allowing them to include the asset alongside other securities within retirement or tax-advantaged accounts.

These investment vehicles also enable large institutions to gain exposure to Bitcoin. First-quarter reporting data revealed that over 20% of exposure to U.S. spot Bitcoin ETFs was held by large investors and institutions with total assets exceeding $100 million, including hedge funds, banks, and even the state of Wisconsin’s pension fund.

The growth of Bitcoin ETFs has been particularly strong in the United States. According to Farside data, May 24 marked another robust day for U.S. Bitcoin ETFs, with inflows reaching $251.9 million.

This continues a streak of ten consecutive trading days of positive inflows into U.S. Bitcoin ETFs. BlackRock IBIT led the pack with an inflow of $182.1 million, bringing their total net inflow to $16.4 billion.

Fidelity FBTC followed with a $43.7 million inflow, pushing their total net inflow to $8.7 billion. VanEck HODL also experienced significant activity, recording a $15.6 million inflow, which raised their total net inflow to $525.3 million.

Grayscale GBTC, which was converted into a spot ETF in mid-January, has seen significant outflows, losing around 330,960 BTC, or 53% of its previous holdings.

Despite this, it remains the largest fund holding Bitcoin, with 289,040 coins worth around $19.9 billion. However, BlackRock’s iShares Bitcoin Trust is rapidly catching up and may surpass Grayscale GBTC this week if inflows remain steady.

The growth of Bitcoin held in ETFs has raised questions about whether it is slowing down the growth of Bitcoin held in self-custody.

A chart displaying how much BTC is held in various addresses by amount shows that there has been no growth in self-custody from 2023 to 2024.

However, it is worth noting that there was also no growth between 2017 and 2018, according to the chart.

The milestone of 1 million BTC held in ETFs highlights the increasing mainstream acceptance of cryptocurrencies and the growing demand for regulated investment vehicles that provide exposure to digital assets.





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