As Bitcoin continues to mature, the rapid growth of Bitcoin exchange-traded funds (ETFs) is one of the most telling indicators of its longevity and integration into the broader financial ecosystem. These products, which provide general, regulated exposure to Bitcoin, have attracted significant inflows from both institutional and retail investors since their launch. According to data aggregated by Bitcoin Magazine Pro’s Chart of cumulative Bitcoin ETF flowsBitcoin ETFs have already accumulated more than 936,830 BTC, which begs the question: Will these holdings exceed 1 million BTC before 2025?
The #Bitcoin ETFs have already accumulated 936,830 #BTC! 🏦
Will this value exceed 1,000,000 BTC before 2025? 🪙
Let me know 👇 pic.twitter.com/UojJpJlC4P
— Bitcoin Magazine Pro (@BitcoinMagPro) December 16, 2024
The meaning of the 1 million BTC mark
Crossing the 1 million BTC threshold would be more than a symbolic milestone. This would indicate deep market maturity and long-term confidence in Bitcoin as a credible, institutional-grade asset. Such a large amount of Bitcoin locked up in ETFs effectively creates a tightening of supply in the open market and sets the stage for a strong catalyst for upward price pressure. As fewer coins become available on exchanges, the market’s long-term equilibrium shifts – potentially increasing Bitcoin’s floor price and reducing downward volatility.
The trend is your friend: record-breaking inflows
The dynamic is undeniable. November 2024 saw record inflows into Bitcoin ETFs of over $6.562 billion – over $1 billion more than the previous month. This wave of capital inflow dwarfs the speed of new Bitcoin creation. In November alone, only 13,500 BTC were mined, while more than 75,000 BTC flowed into ETFs – 5.58x the monthly supply. Such an imbalance highlights the current dynamics of scarcity. When demand far exceeds supply, the market’s natural reaction is to push prices upward.
A graph of insatiable demand
In a groundbreaking moment, BlackRock’s Bitcoin ETF recently surpassed the company’s iShares Gold Trust in total fund assets. This moment was captured visually in the November issue of The Bitcoin ReportThis shows a clear shift in investor preferences. For decades, gold was at the forefront of “safe haven” investments. Today, Bitcoin’s increasing role as “digital gold” is confirmed by ever-growing institutional allocations. The appetite for Bitcoin-backed ETF products has become unrelenting as both experienced investors and newcomers recognize Bitcoin’s potential to serve as a cornerstone in diversified portfolios.
Long-term holding and supply shock
A key feature of Bitcoin ETF inflows is the long-term nature of these investments. Institutional buyers and long-term allocators are less likely to trade frequently. Instead, they purchase Bitcoin through ETFs and hold it for long periods of time – years, if not decades. If this pattern continues, Bitcoins held in ETFs will effectively be taken out of circulation. The result is a steady drip of supply leaving exchanges, driving the market toward a potential supply shock.
This trend is clearly illustrated by the latest data from Coin jar. Just about 2.25 million BTC are currently still on the exchanges, indicating a continued decline in readily available supply. The chart below shows a divergence where Bitcoin’s price appreciation continues to rise while exchange balance sheets decline – an irrefutable signal of scarcity dynamics.
A perfect Bitcoin bull storm and the march towards $1 million
This developing momentum has already pushed Bitcoin past the $100,000 mark, and such achievements may soon feel like distant memories. As the market rationalizes a possible trip toward $1 million per BTC, what once seemed like a lofty dream appears increasingly feasible. The “multiplier effect” in market psychology and price modeling suggests that the ripple effects can lead to explosive price increases once a large buyer comes into play. Because ETFs continually accumulate, each major purchase can trigger a cascade of subsequent purchases as investors fear missing out on the next rise.
The new Trump administration, the Bitcoin law and a US strategic reserve
If current trends were not already optimistic enough, a new and potentially transformative scenario is brewing on the geopolitical stage. President-elect Donald Trump in 2025 has expressed support for the “Bitcoin Act,” a bill that would direct the Treasury Department to establish a strategic Bitcoin reserve. The plan involves selling a portion of the US government’s gold reserves to acquire 1 million BTC – about 5% of all Bitcoin currently available – and holding it for 20 years. Such a move would signal a monumental shift in U.S. monetary policy and position Bitcoin on par with gold (or even ahead of gold) as the cornerstone of national wealth storage.
With ETFs already causing a shortage, a move by the US government to secure a large strategic Bitcoin reserve would exacerbate these effects. Keep in mind that only 2.25 million BTC are available on exchanges today. If the United States tried to acquire almost half of it in a relatively short period of time, the imbalances between supply and demand would become extraordinarily large. This scenario could trigger a hyperbullish mania and push the price of Bitcoin into previously unthinkable territory. At this point, even $1 million per BTC could be considered rational, a natural extension of the asset’s role in global finance and national strategic reserves.
Conclusion: A confluence of bullish forces
From short-term ETF inflows exceeding new issuance by a factor of five to longer-term structural changes like a potential Bitcoin reserve in the US, the fundamentals are in favor of Bitcoin. The increasing scarcity, combined with the multiplier effect of large buyers entering the market, creates the conditions for an exponential increase in prices. What was once considered unrealistic – a $1 million Bitcoin price – is now within the realm of possibility, underscored by tangible data and powerful economic forces.
The journey from today’s levels to a new era of Bitcoin price discovery involves more than just speculation. It is supported by tightening supply, unrelenting demand, increasing institutional acceptance and even the potential recognition of the world’s largest economy. With this in mind, exceeding 1 million BTC in ETF holdings before 2025 could be just the beginning of a much bigger story – one that could reshape global finance and redefine the concept of a reserve asset.
Find the latest insights on Bitcoin ETF data, monthly inflows and evolving market dynamics here Bitcoin Magazine Pro.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
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