12.5 Times More Bitcoin Demand Than Production: Wall Street ETFs Take the Lead

The acquisition rate of Bitcoin by Wall Street ETFs has skyrocketed, exceeding mining production by a factor of 12.5 on a daily basis. Following the SEC’s green light for Bitcoin Spot ETFs in January 2024, there was a significant increase in institutional involvement in the cryptocurrency market.

According to Anthony Pompliano, a prominent Bitcoin investor and founder of Morgan Creek Digital Assets, this newfound institutional demand is set to push the price of Bitcoin higher, potentially surpassing previous all-time highs.

Bitcoin ETF Launch Spurs Institutional Rush

Anthony Pompliano reports that the demand for Bitcoin ETFs from institutional investors is 12.5 times greater than the amount of Bitcoin produced on a daily basis. This increase in demand coincides with the cryptocurrency market’s anticipation of the impending halving event in mid-April, which will further tighten the supply-demand dynamic by halving the pace at which new Bitcoins are created.

The first Bitcoin ETF slot was approved by the SEC in early 2024, which greatly boosted institutional interest in Bitcoin. Institutional investors and ETF providers have increased their Bitcoin holdings despite an early price decline; Grayscale is leading with almost 475,000 BTC.

Wall Street’s Affinity for Bitcoin

In a CNBC interview, Pompliano shared his insights on why institutions are increasingly embracing Bitcoin: “Bitcoin has become Wall Street’s preferred asset.” He went on to explain that cryptocurrency offers a store of value and a hedge against inflation, making it an ideal fit for institutional portfolios. Pompliano also highlighted the impressive performance of recently launched spot Bitcoin ETFs, which have collectively seen record-breaking inflows.

In just 20 days of trading, Spot Bitcoin exchange-traded funds (ETFs) have acquired an astounding $10 billion in assets under management (AUM). BlackRock, Fidelity, and Bitwise Asset Management are at the forefront of these investments.

If Bitcoin successfully breaks above the $50,000 mark, Material Indicators predicts minimal resistance to further price appreciation, potentially leading to a substantial short squeeze. An upcoming inflation report could lead to a stock market adjustment based on the report’s influence over investor confidence and economic trends.

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