Spot Bitcoin ETFs’ holdings surpass Satoshi’s stash – A ‘dangerous sign’ or…

• Bitcoin ETFs now hold more Bitcoin than Satoshi Nakamoto – a sign of robust demand
• ETF activity has significantly ballooned this year, spurring BTC’s price on the charts

Spot Bitcoin ETFs have been crucial to the cryptocurrency’s demand so far this year. In fact, their level of accumulation has hit new heights over the last few months, to the extent that they recently surpassed Satoshi Nakamoto’s holdings.

Spot Bitcoin ETFs in the U.S reportedly held 1.104 million coins, as of 6 December. This was higher than the 1.1 million coins in an address belonging to Bitcoin’s Satoshi Nakamoto. This means institutions in the U.S now control the biggest share of BTC in circulation. This was first revealed by Bloomberg’s Eric Balchunas who tweeted,

“KING OF THE HILL: The US spot ETFs have just passed Satoshi in total bitcoin held, now hold more than 1.1m, more than anyone in the world, and they’re not even a year old yet, literally babies still. Mind blowing.”

This development is a testament to robust institutional demand across the market. And yet, this outcome has not been without criticism. Jonas Schnelli, a former Bitcoin developer criticized this milestone, describing it as a sign of centralization.

Centralization concerns in the crypto market stem from control issues. If too much of Bitcoin is controlled by centralized entities, it paves the way for a 51% attack. However, the current institutional holdings only account for roughly 5.5% of the total circulating supply.

The current institutional holdings are also spread out across multiple companies that operate Bitcoin ETFs. On the contrary, it may not necessarily be a matter of centralization, but concentration.

A milestone for Bitcoin institutional adoption

The fact that ETFs now have the lion’s share of BTC holdings is a testament to the level of Bitcoin’s attractiveness to the institutional class. A look at Bitcoin spot cumulative flows reveals the true extent of ETFs demand for the asset in 2024.

Source: Farside.co.ke

According to the same, spot cumulative flows doubled from early August to December – A reflection of the aggressive demand that ensued due to a combination of factors. These might double even further owing to the upcoming pro-crypto administration in the United States and declining interest rates.

The surge in institutional demand in the first year of ETFs approvals suggests that sentiment has weighed heavily in favor of the asset. It could also set the pace for more demand in the coming years.

Another possible impact is that this strong demand may encourage other countries to follow suit with their own ETF approvals. Countries like Japan, China, Russia and South Korea, among others, have so far demonstrated interest in Bitcoin.

This outcome underscores a 180 degree shift in perception, especially many governments were against Bitcoin not so long ago. In other words, Bitcoin’s adoption trend may grow exponentially in the future.