Spot Bitcoin ETF capital: Could funds potentially buy up all BTC in circulation?
A company or a government might attempt to buy a significant amount of Bitcoin, but it would likely get tricky pretty fast, as the price will only continue to rise, analysts say.
The long-awaited potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States could mean the market sees Bitcoin supply suddenly drop as funds snap up as much as they can, some market observers have predicted . With prominent firms like Ernst & Young expecting U.S. Securities and Exchange Commission (SEC) approval to trigger massive demand from institutions , will the financial giants behind these ETFs leave any actual Bitcoin on the market for the rest of us?
A U.S.-based spot Bitcoin ETF could bring up to $30 billion of fresh cash into Bitcoin, crypto entrepreneur and investor Lark Davis estimated in September 2023. In such a scenario, spot Bitcoin ETF issuers would buy up about 50% of all Bitcoin on crypto exchanges to back their ETFs, he projected.
But buying as much Bitcoin as possible would likely get tricky for anyone, several industry executives and analysts agree.