Daily Bitcoin Demand = 2.6x New Supply 📈

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📊 Bitcoin Ownership Distribution

Bitcoin ETFs have entered the industry, but they still own just a small portion of all the bitcoin supply.

Only about 3.9% of all the bitcoin supply is currently held by Funds and ETFs, with the vast majority in the hands of roughly 82-130 million individuals.

A large portion of bitcoin is also estimated to be lost as it hasn’t moved in a decade. In many cases due to self-custody mistakes and lost keys, or simply because bitcoin had almost no value in its first few years!

Learn more about the individuals and businesses that own the most Bitcoin in our Learn article.

📈 ETFs Are Buying Up Supply

Since the Bitcoin ETFs started trading on January 11, they have collectively purchased an average of 2,372 BTC per day to cover the inflows. Over the past month this has added up to over $3.8 billion.

New supply from Bitcoin mining is only 900 bitcoin per day (144 blocks x 6.25 BTC)

The ETFs alone, excluding any other Bitcoin investors, are thus buying up 2.6x the new supply that is entering circulation. Over the past 3 days, this has ramped up to an average of 12.5x the daily supply!

Once the Bitcoin halving hits in mid-April, the bitcoin block reward will be cut in half to 3.125 BTC, and Bitcoin ETFs would, at the average rate since their launch, be buying up 5.2x the new daily supply.

Our take: In our last newsletter we mentioned it could take a few weeks for GBTC outflows to settle down. This seems to be happening now.

⚙️ The Scaling Bitcoin Situation

For less technical people, it can be hard to keep up with the debates and proposals to make Bitcoin scale so that billions of users can hold it in self-custody.

We made a video to go through: 

  1. The state of Lightning Network development.
  2. Which scaling solutions are being considered at the moment.
  3. How the recent fee market affects scaling discussions.
  4. What role designers play in scaling Bitcoin.

Take a look if you’re interested in the future of Bitcoin but struggling to keep up.

The Team at River

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