Spot bitcoin ETFs own a combined 692,939 bitcoins, representing 3.5% of all bitcoin currently in existence.
The launch of spot bitcoin ETFs last month opened the floodgates for Main Street investors to conveniently purchase bitcoin through their existing brokerage accounts.
The iShares Bitcoin Trust has seen the highest inflows, hitting $4.39 billion in assets as of Monday, while the Fidelity Wise Origin Bitcoin ETF is in second place, attracting $3.67 billion in assets.
“I think a lot of this is just indicative of the popularity of bitcoin as an asset class,” MicroStrategy Executive Chairman Michael Saylor told CNBC on Monday. “There’s 10-years of pent-up demand. People have been waiting for these ETFs, and finally mainstream investors are able to access bitcoin and I think that’s what’s driving the surge of capital in the asset class.”
Altogether, the 11 spot bitcoin ETFs that were approved by the SEC last month have so far attracted more than $10 billion in assets, excluding the Grayscale Bitcoin Trust.
The Grayscale Bitcoin Trust converted to an ETF last month, with assets of about $28 billion. It has since seen about $5 billion in outflows.
Saylor said that the bitcoin ETFs are important because they conveniently offer investors access to a risk asset that has a history of displaying low correlations to other asset classes.
“It’s uncorrelated to traditional risk assets because it doesn’t come with exposure to any given country, currency, company, quarterly result, product cycle, competitor, not to weather, not to war, not to an employee base or supply chain. So that makes it a natural addition to the portfolio of a responsible investor,” Saylor said.
The solid demand for bitcoin ETFs should create a favorable supply and demand environment for bitcoin holders, according to Saylor, who acknowledged that bitcoin will undergo a halving later this year, which lowers the bitcoin reward for miners.
“Now people are beginning to realize that there’s 10x as much demand for bitcoin coming in through these ETFs as there is supply coming from the natural sellers who are the miners,” Saylor said.
MicroStrategy stands to benefit if Saylor’s outlook proves true, as the company owns 190,000 bitcoins worth about $9.4 billion.
There are currently 19.63 million bitcoins in existence, and the last of the 21 million tokens won’t be mined until 2140.