All-time high in immobile Bitcoin supply as institutional interest rises
The immobile supply of Bitcoin (BTC) hit an all-time high in June, with almost 70% of the circulating supply sitting still for a year, a report asset manager Ark Invest has said.
The report, titled “The Dawn of the ETF Era?” focused on the potential of a new spot Bitcoin exchange-traded fund (ETF) to give the Bitcoin market fresh impetus, while pointing to on-chain data as a catalyst for price appreciation going forward .
In particular, the ever-increasing proportion of the circulating BTC supply that is in the hands of long-term holders confirms that the holder base is getting “stronger,” according to the firm.
He added that with almost 70% of the coins being held for at least a year, the share of long-term holders in the Bitcoin pie has now hit an all-time high “in both relative and absolute terms.”
Greater institutional interest
According to the firm, the bullish signal from long-term holders comes as more financial institutions show interest in the number one cryptocurrency.
In particular, BlackRock, the Wall Street giant known as the world’s largest asset manager, applied last month to list a Bitcoin ETF along with other major asset managers such as Invesco, Fidelity and WisdomTree.
Each of the firms hopes to be the first company to bring to market a spot Bitcoin-backed ETF instead of Bitcoin futures, a development that is also believed to drive the price of Bitcoin to new highs.
So far, all attempts to list a spot Bitcoin ETF have been rejected by the US Securities and Exchange Commission (SEC).
GBTC Discount Closing
Meanwhile, another notable development in recent weeks has been the closing of the net asset value (NAV) discount of Grayscale Bitcoin Trust (GBTC), an investment vehicle that has been used by investors to gain exposure to Bitcoin in the absence of a True Spot Bitcoin ETF in the US
Grayscale has long wanted to convert GBTC into a spot Bitcoin ETF to remove the discount at which it trades, but so far the SEC has rejected all attempts to do so.
However, with the BlackRock ETF filing bringing new optimism to the market that an ETF could be approved, investors have also flocked to GBTC in the belief that a conversion will be approved and the discount removed.
Ark Invest is run by well-known technology investor Cathie Wood, and the company is heavily invested in Bitcoin and companies working in the cryptocurrency industry, including Coinbase.
In mid-March, the firm raised more than $16 million for two new private crypto funds.