The first North American Bitcoin ETF is already soaking up tons of Bitcoin with half a billion dollars AUM...
The first North American Bitcoin ETF quietly launched last week without a ton of fan-fair.
That's probably because it happened at a time when bitcoin was making new all time highs and then suddenly dropping by 20%+ in a matter of hours...
Basically, if the launch hadn't happened at a time when bitcoin was so volatile, it would be being talked about a lot more than it is.
Based on date from Glassnode, the ETF already has over half a billion dollars in AUM:
(Source:
)https://twitter.com/glassnode/status/1364258469398929413/photo/1
- glassnode
The fund already has over 8,288 BTC with 2,251 being added the other day alone.
That's great and all but how does that impact the price of bitcoin?
I'm glad you asked!
While I don't know exactly how this particular ETF works, I know that it is physically settled with actual bitcoin.
Meaning that investors can take settlement in bitcoin if they so choose.
That means that every share in the ETF would have to be actually backed by bitcoin, something that is very important to bitcoin investors.
Cash settled means no actual bitcoin would change hands and would instead be a derivative betting vehicle on the price of bitcoin as opposed to an actual bitcoin investment vehicle.
The inflows into this further soak up liquid supply sitting on Exchanges and makes it easier and easier for the price to go up...
In fact, the illiquid supply of bitcoin has been growing at a faster pace than the total circulating supply of bitcoin for some time now, pretty impressive considering roughly 900 new bitcoin are created every single day:
(Source:
)https://twitter.com/n3ocortex/status/1364964682335944714/photo/1
- n3ocortex
This isn't surprising with institutions like MSTR, TSLA, SQ, Grayscale, and others soaking up all the liquid supply on Exchanges.
Now with a major ETF launching, the rate of supply being soaked up is probably going to increase.
With not much supply out there, it will take less demand to send the price moon-ward.
What we have seen so far is only just the beginning of the fun bitcoin investors are going to have in 2021.
Stay informed my friends.
-Doc