Will Bitcoin ETF pose a risk to BTC in 2025?
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As the demand for Bitcoin (BTC) ETFs surges and raises concerns about supply shocks, whether Ethereum (ETH) can become the unexpected crypto hero of 2025 has become a hot topic in crypto market discussions. Let’s dive into the current market trends and the role Ethereum ETFs may play.
Market Impact of Bitcoin ETF
Continuous accumulation of BTC by Bitcoin ETF: According to data from Blockchain.com, by December 2024, the demand for Bitcoin ETFs far exceeded the supply of BTC. In December, these ETFs purchased 51,500 BTC, while miners produced only 13,850 BTC during the same period. This supply-demand imbalance has sparked concerns in the market about future supply shocks, especially since the demand for ETFs is about 272% higher than the production by miners.
Growth of Bitcoin ETF holdings: By December 17, 2024, the total holdings of global spot Bitcoin ETFs had reached 1,311,579 BTC, accounting for 6.24% of the total Bitcoin supply. Analysts predict that as the bull market arrives, this percentage may further increase to 10-20%, exacerbating the supply tightness in the market.
Increase in inflow funds: According to Glassnode data, in December 2024, the net inflow of funds into Bitcoin ETFs was $4.63 billion, almost double the monthly average, indicating exceptionally strong demand for Bitcoin ETFs in the market.
Short-term correction: Although the price of Bitcoin broke through $100,000, it subsequently experienced a 6.21% correction. The surge in ETF demand may be a factor contributing to the volatility in the Bitcoin market, while supply shocks could lead to larger price fluctuations.
Performance of Ethereum ETF
Resilience of Ethereum ETF: Despite a capital outflow of $86.8 million from the Ethereum ETF on January 7, 2025, the total inflow into the Ethereum ETF in 2024 reached $35 billion, indicating that investor confidence in Ethereum remains strong. While Bitcoin ETF dominates the scene, the performance of Ethereum ETF shows its strong resilience.
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