Bitcoin Supply Shock on the Cards While ETF Inflows Reach a New High

The latest issued spot BTC ETFs have a prominent place among the top catalysts that drive the price rally of Bitcoin. In this respect, the top cryptocurrency may experience a supply shock because the BTC ETFs are continuously witnessing heavy accumulation of the circulating Bitcoin tokens. Since the ETFs’ approval in January this year, they have accumulated more than four percent of the presently circulating Bitcoin.

BTC May Shortly Go Through a Supply Shock As Inflows in ETFs Set New Record

A crypto analyst “Mister Crypto” recently took to X to disclose the breaking news. As per Mister Crypto, the balance of Bitcoin on exchange platforms is consistently lowering. The analyst moved on to make the conclusions out of this situation. Hence, the reported result could be a supply shock. At present, above $9.37B has been invested in this regard.

On the 7^th of March this year, the latest trading day, the net inflow of ETFs touched $472.6M. Just the Bitcoin ETF of BlackRock obtained up to 12,600 BTC. As a result of this, the cumulative holdings thereof reached a significant amount of nearly 183,300 BTC.

This equals almost $12.3 billion, marking a new inflow record for the firm. There is no definite method to define when the decline of the inflows could begin. Even then, the market members are preparing for the potential scenario that would bring forth a supply shock. This denotes a point when the market demand for an asset broadly outpaces its supply.

This paves the way for an enormous increase in the respective asset’s price. In Bitcoin’s case, the respective situation looks quite inevitable. A significant thing is that the Bitcoin halving is just 6 weeks away. This will decrease the number of the latest released tokens on each block from up to 6.25 to just 3.125 Bitcoin.

Spot ETFs Assist Bitcoin to Exceed Its Former All-Time High

This will ultimately lower the number of Bitcoins allocated for the market. The impact of this procedure usually takes more than one month. The spot ETFs have assisted to beat its former all-time high ahead of halving. If this continues, the possibility of a resilient supply shock is substantial.