A big change is brewing up in the world of Bitcoin. Over time, US-based ETFs will become the largest holders of Bitcoin, surpassing even Satoshi Nakamoto, the mysterious founder of the cryptocurrency. This development certainly also captures how institutional interest in the cryptocurrency space is growing.
Bloomberg senior ETF analyst Eric Balchunas surprised the crypto community with a farfetched prediction in relation to Bitcoin ownership. Balchunas claims that if trends continue, by the end of this year, the world’s most elusive man, Satoshi Nakamoto, will not be holding the largest share of the cryptocurrency. This prediction assumes a dramatic change within the ownership landscape of Bitcoin, with institutional actors gaining ground very fast.
Didn’t realize US ETFs are on track to pass Satoshi in bitcoin held in October. BlackRock alone is already #3 and on pace to be #1 late next year, and will likely stay there for a very long time Ht @EdmondsonShaun pic.twitter.com/QGsO00zrxp
— Eric Balchunas (@EricBalchunas) August 12, 2024
In that light, Bitcoin’s anonymous creator doesn’t make the top list, with only about 1.1 million BTC said to be in his/her/their possession. Still, US-based Bitcoin ETFs, presently managing about 909,700 BTC, are in the process of quickly catching up with this number, underpinning a new reality of an influx of traditional financial institutions into the ecosystem.
As these ETFs continue to gain popularity, Nakamoto’s dominance could be surpassed, marking a shift in Bitcoin ownership dynamics. This total doesn’t account for Grayscale’s holdings, which would reduce the ETF count to approximately 645,899 BTC.
Institutional Dominance
The fast rising concentration of Bitcoin by US ETFs can be mostly attributed to institutional players. BlackRock, the biggest investment manager worldwide, has also evolved into a heavyweight in the bitcoin space. With 347,767 BTC in its IBIT Bitcoin ETF, it is now the third-biggest holding and, at this rate, likely to surpass all others before the end of 2025.
Fidelity’s Foray Into Crypto
The other finance giant, Fidelity, has also made some substantial headway in the cryptocurrency space. It is currently holding 176,626 BTC, and its FBTC fund helps underscore growing institutional participation in the market. Grayscale, another popular digital currency asset manager, went a step further in the institutionalization of the Bitcoin ecosystem by holding substantially 263,801 BTC.
According to analysts, ETF holdings of Bitcoin could even surpass Nakamoto as early as October 2024. The timeline takes into account the current rate of accumulation and the projected growth of the cryptocurrency market. Of course, institutional interest in Bitcoin is only going to grow in the coming years when players such as Fidelity and BlackRock, who are leaders in this field, have substantial investments channeled to the same area.
That Bitcoin ETFs have grown to be the biggest holders of the cryptocurrency is big news. It emphasizes how Bitcoin is becoming more widely accepted and how institutional investors are becoming more confident in the cryptocurrency sector. The more confidence people and organizations put into Bitcoin, the less doubt we’ll have, and soon, we may even see more institutional money flowing into the space.
What this means for Bitcoin’s future—whether the dynamics of the crypto market will shift with institutional investors at the helm—remains uncertain. However, a new era in the Bitcoin world is beginning, and it will be intriguing to see how everything develops.
Featured image from JPM & Partners, chart from TradingView