In this post:
- Bitcoin ETF outflows coincided with the most recent price slide.
- US-based Bitcoin ETF are cash-created, causing some delay between issuing shares and acquiring BTC, in most cases from Coinbase.
- Some of the ETF do not reveal coin outflows, while whale holding and some buying are still supporting the price.
Bitcoin (BTC) continued its lackluster price performance, sliding further under $69,000 in the new week. The slide comes after a period of peak reported inflows into some major ETFs.
BTC slid to $66,947.69, sparking a market-wide correction. But even during these market conditions, there are still signs of accumulation, adding to the long-term holding trend. Selling is mostly from the newest holders, while long-term wallets keep their coins.
As noted by Bitcoin influencer WhalePanda, the recent market slide also coincided with the start of an outflow trend from some existing ETFs.
Good morning,
— WhalePanda (@WhalePanda) June 11, 2024
Yesterday's ETF flows were negative for $64.9 million.$GBTC had $39.5 million outflows, Invescro $20.5 million and Valkyrie $15.8 million.
Price stayed stable for yesterday around $69.5k and then dumped this morning to $68k.
Don't have much to say about the… pic.twitter.com/UtLtrx7CXm
Tracking the BlackRock ETF shows no actual outflow of coins for the past two weeks. The cash outflow may not create an immediate need to sell or move coins.
The current list of ETFs relies on Coinbase Custody to store their coins, with only some wallets transparently visible. Even earlier addresses of the Fidelity Bitcoin ETF have been emptied out, with the funds moved to a series of new wallets. In any case, Bitcoin ETF holder wallets may not be the cause of fire-selling.
Laurent Kssis, crypto exchange-traded product (ETP) specialist at CEC Capital, explained that most US-based Bitcoin ETFs are cash-created. This means that ETFs must have a reliable way to buy BTC once they create the shares based on a BTC cash price. With most ETF relying on Coinbase, there is a fast mechanism to acquire the requisite BTC balances.
I can’t see an arrangement in the U.S. where the AP will source from miners directly. However, this was done in the earlier days of crypto ETP with certain issuers.Laurent Kssis, crypto exchange-traded product (ETP) specialist at CEC Capital
European ETFs are in-kind created, which may not lead to a disparity between cash and BTC held. Currently, European traders still trade the Coinshares XBT Provider fund traded on Nasdaq Nordic, which is a synthetic exchange-traded product.
Whales and corporate participants still show regular activity
Bitcoin on-chain activity is still showing a pattern among bit accounts. Corporate and institutional buyers may be active, with around 1,000 large-scale wallets per day showing some activity.
The recent activity chart shows a recurrent pattern of activity, with a spike matching the yearly high. Some big-scale holders sell at the peak, but ongoing wallet activity plus exchange outflows is showing signs of further accumulation.
Miners are one of the main sources of coins in this market. Mining pools hold less than 2M BTC in total for the first time in years. Selling accelerated in early June, and while it is still not a full “miner capitulation,” reserves have been sliding steadily over the past months.
Other acquisitions or storages include several of the top 100 wallets, where three new prominent addresses showed new balances of exactly 47,229 BTC, accrued in the past 30 days. Overall, top wallets showed a prevalence of inflows and fewer outflows in the past month.
Top ETF still show signs of buying, rare outflows
Most current ETF acquisitions depend on Coinbase to supply the funds with a balance of coins. So far, few funds have revealed their wallets. Two funds have shown their buying patterns and transparently revealed their latest activities.
The WisdomTree Bitcoin Fund acquired around 1,000 physical Bitcoins in the past month after accelerating acquisitions since the start of 2024.
The VanEck: Hodl Bitcoin ETF is slowly acquiring more coins. The fund is unique in that it receives most of its physical coins in small installments through the Gemini exchange.
Long-term holders are also helping the scarcity. As of June 10, the supply of long-term holders was still at around 14,776 BTC. The reserves are still below those at the end of 2023 when they peaked above 16,000 BTC.
Retail holders also show signs of keeping their coins with the expectation for an extended bull market. In the short term, buying comes from limit positions below $67,000.
