BlackRock ETF buys 3.25% of BTC supply as New Bitcoin Capital dries up

BlackRock’s spot Bitcoin exchange-traded fund (ETF) is nearing the $70 billion mark in assets under management, signaling growing interest from institutional investors even as retail inflows appear to be slowing.

BlackRock, the world’s largest asset manager, has acquired over $69.7 billion worth of Bitcoin (BTC) through its iShares Bitcoin Trust (IBIT) ETF, representing over 3.25% of the total BTC supply.

BlackRock’s IBIT ETF now controls over 54.7% of the market share of all US spot Bitcoin ETFs, which hold 6.12% of the current Bitcoin supply, according to Dune data.

BlackRock’s milestone comes less than a year and a half after US spot Bitcoin ETFs debuted for trading on Jan. 11, 2024.

The milestone comes amid sustained inflows into the ETF market. US Bitcoin ETFs logged eight consecutive days of net positive flows, bringing in $388 million in Bitcoin on Wednesday, according to Farside Investors.

IBIT has also entered the world’s top 25 largest ETFs by assets under management.

BlackRock’s fund has grown to become the world’s 23rd largest ETF among crypto and traditional finance products, according to data from VettaFi.

Still, some analysts say that the demand for ETFs is being offset by profit-taking and selling pressure from miners.

“A breakout may need a new catalyst or sentiment shift,” Iliya Kalchev, an analyst at Nexo, told Cointelegraph. He added that long-dormant wallets are currently absorbing more supply than miners are producing, and added that corporate treasury strategies and accumulation from large investors continue to offset profit-taking.

Related: Genius Group Bitcoin treasury grows 52% as 1,000 BTC goal reaffirmed

High-value investors dominate BTC transactions

Onchain data from Glassnode shows that large-value transfers are dominating Bitcoin network activity. Although the total number of transactions has declined, the average transaction size is now $36,200.

“This trend implies that larger entities continue to utilize the Bitcoin network, with the throughput per transaction rising even as overall activity by count declines,” according to a Glassnode report released on Thursday.

Moreover, transactions exceeding $100,000 now account for over 89% of network activity, which “reinforces the view that high-value participants are becoming increasingly dominant,” Glassnode said.

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While large players accumulate, fewer new retail investors appear to be entering the market.

Bitcoin’s short-term holder cohort has fallen to just 4.5 million BTC, down over 800,000 BTC from holding 5.3 million BTC on May 27, signaling that “new money is drying up in Bitcoin,” according to a Friday report from analytics platform CryptoQuant.

If investor demand continues to weaken, Bitcoin may find its next significant support near the $92,000 mark, which is the traders’ onchain realized price that acts as a significant support level during bull cycles, according to CryptoQuant.

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