Bitcoin ETFs Create “Demand Shock,” Buying 10x More BTC Than Is Mined

Since the U.S. SEC approved 11 spot Bitcoin ETFs in January 2024, over $150 billion in capital has flooded into the market. The sudden inflows show powerful demand from both institutional and retail investors seeking direct Bitcoin exposure through a traditional, regulated format.

BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) are in both assets and volume. With more than 1.29 million BTC now held across all of these funds, spot Bitcoin ETFs account for over 6% of the total circulating Bitcoin supply.

The approval of spot Bitcoin ETFs on January 10, 2024, followed a decade of regulatory delays. A key legal victory came in 2023 when a federal court sided with Grayscale in its challenge against the SEC, stating the agency had not properly explained its reasoning for rejecting spot products while allowing futures-based ones.

Unlike futures ETFs, spot Bitcoin ETFs hold actual BTC as their underlying asset. ETF issuers work with Authorized Participants (APs), typically large financial firms, who acquire Bitcoin on the open market and deliver it to the fund in exchange for ETF shares. This mechanism helps keep the ETF’s share price aligned with the value of the Bitcoin it holds.

Institutional-grade custodians handle the secure storage of the assets. Coinbase Custody services most of the ETFs, while Fidelity uses its own in-house solution.

As of July 2025, BlackRock’s IBIT is the clear leader with $87.5 billion in assets under management (AUM) and a daily trading volume that exceeds $2 billion. Fidelity’s FBTC follows with $24.6 billion in AUM.

Despite being the first to market, Grayscale’s GBTC trails with $22 billion in AUM, largely due to its much higher 1.50% expense ratio. Newer funds from issuers like Bitwise and ARK are competing with lower fees, but their daily volumes remain significantly smaller.

The spot Bitcoin ETFs have fundamentally changed the demand and supply dynamics of the crypto market. Daily purchases from the ETFs frequently exceed the new BTC being created by miners by as much as tenfold, especially after the April 2024 Bitcoin halving. These powerful and consistent inflows have contributed to a 160% price increase for Bitcoin since the funds were approved.