The world’s largest cryptocurrency may be at risk of a supply shock as demand from United States (US) Spot Bitcoin Exchange Traded Funds (ETFs) has surged far beyond expectations. In December 2024, the volume of BTC acquired through Spot Bitcoin ETFs more than tripled the amount mined during that same month, underscoring the severe imbalance between supply and demand.
Spot Bitcoin ETFs Trigger Supply Shock Risks
In December 2024, US Spot Bitcoin ETFsBTC miners generated and supplied to the market that month.
According to increase in demand for Spot Bitcoin ETFs has raised concerns about a potential BTC supply shock, with analysts suggesting that it could happen soon.
Specifically, Lark Davis, a crypto analyst,US Spot Bitcoin ETFs. Davis disclosed that at some point in December, BTC ETFs had bought 21,423 BTC; meanwhile, miners had produced only 3,150 BTC around the same time.
The analyst also BTC’s total supply, raising more concerns about a major supply shock.
Concentration Of Spot BTC Inflows In December
Spot Bitcoin ETF inflows was more concentrated during the first half of the month, while the second half saw outflows, with December 26 being the exception.
Not surprisingly, the timing for this surge and subsequent decline in Bitcoin ETF inflows aligns with BTC’s price movements in December. At the beginning of the month, BTC experienced upward momentum, skyrocketing to a new ATH above $108,000 on December 17, fueled by the bull market hype and soaring demand. However, following this peak, BTC’s price saw a sharp decline, a drop that coincided with the timing of significant outflows from Spot Bitcoin ETFs, as reported by Glassnode.
Despite the surge in demand for Spot Bitcoin ETFs in December, new data shows that investors have extended their accumulation trend into January 2025. On January 3, investors purchased over $900 million worth of BTC through Spot Bitcoin ETFs. More recently, US Spot Bitcoin ETFs acquired an additional 9,500 BTC, worth over $966 million at the current market price.
