The growing prominence of spot Bitcoin ETFs (exchange-traded funds) is reshaping the crypto market. A CryptoQuant analyst, MAC_D, has revealed that these funds now control 5.33% of the total mined BTC supply — a significant leap from the 3.15% recorded in January.

This marks an addition of 425,000 BTC within ten months, highlighting the rising demand for physically-backed Bitcoin ETFs. 

Bitcoin ETF Accumulation Drives BTC Price Growth

The analyst highlights a strong correlation between the accumulation of Bitcoin by spot ETFs and its price movements. This trend was particularly evident during Bitcoin’s price surges in March and November, fueled by significant ETF inflows and positive market sentiment. 

“Spot ETF volume increased by +425,000 BTC to 629,900 BTC → 1.0545 million BTC in January when trading began. This is an increase of 2.18% in just 10 months, or 3.15% → 5.33% of the total mined supply of 19.78 million BTC. Looking at March and November, which showed dramatic price increases, we can see that there is a strong correlation between the increase in accumulation and price,” the analyst explained in a post on X.

Indeed, in March, US-listed Bitcoin ETFs saw net inflows of approximately $4 billion, propelling trading volumes to $111 billion — a nearly threefold increase from February. During the same period, Bitcoin’s price surged to a then-record high of over $73,777 on Coinbase.

Similarly, in November, following Donald Trump’s reelection and heightened expectations of regulatory support for crypto, Bitcoin soared past $93,265 on Binance, marking its highest-ever valuation. 

“The more Bitcoin is accumulated in spot ETFs, the stronger the price becomes,” MAC_D added. 

BlackRock’s iShares Bitcoin Trust (IBIT) continues to dominate the spot ETF market. Recent data shows the fund has surpassed $40 billion in assets, accounting for over $3 billion of net inflows since November 6.

While the broader US Bitcoin ETF market displayed mixed performance this week, IBIT added $2 billion in net inflows, consolidating its leadership. 

Overall, US Bitcoin ETFs registered $2.4 billion in inflows during the first half of last week. However, redemptions on Thursday and Friday trimmed the week’s net inflows to $1.6 billion as shown above. 

Regulatory Tailwinds Bolster ETF Adoption

The surge in Bitcoin ETF adoption is closely tied to changing regulatory frameworks. Recently, the US Securities and Exchange Commission (SEC) approved Bitcoin ETF options. This milestone aligned with recent progress from the Commodity Futures Trading Commission (CFTC), which cleared the spot Bitcoin options trading path.

More recently, the SEC and CFTC approved the listing of eco-conscious 7RCC Bitcoin and Carbon Credit Futures ETF. Taken together, these developments further legitimized spot Bitcoin ETFs, enhancing their appeal to institutional investors. This regulatory backing has played a pivotal role in fostering trust and driving capital into the market. 

Optimism surrounding a favorable regulatory environment under the new US administration has also buoyed the inflows into Bitcoin ETFs further. In turn, it has amplified expectations of policies supportive of the digital asset industry, further accelerating Bitcoin adoption via ETFs.  BeInCrypto recently reported that Bitcoin ETFs are now in 60% of top us hedge fund portfolios.

The role of macroeconomic factors, such as Federal Reserve policy and US elections, cannot be overlooked. As the Fed’s monetary tightening cools, risk-on assets like Bitcoin are regaining favor.

Looking ahead, analysts predict that the increasing adoption of spot Bitcoin ETFs could pave the way for Bitcoin’s recognition as a reserve asset. Should the US government adopt this trend, the inflow into ETFs is expected to rise even further, solidifying Bitcoin’s position in global finance. 

Meanwhile, the growing share of Bitcoin held by spot ETFs has broader implications for the crypto market. By controlling over 5% of Bitcoin’s supply, these funds are stabilizing liquidity while potentially reducing market volatility.

Nevertheless, there are concerns about institutional control over Bitcoin, as this would be contrary to the pioneer cryptocurrency’s original decentralization ethos.

“Does this not defeat the whole purpose of “decentralization”? BlackRock will be the biggest hodler, it doesn’t get much more centralized than that,” one X user quipped.

Spot Bitcoin ETFs hurdle its biggest legal roadblock to date after the US Commodity Futures Trading Commission (CFTC) clarified that it’s no longer taking a role in clearing BTC ETF options. In a staff advisory dated November 15th, the CFTC, through its Division of Clearing and Risk, announced that it was transferring the approving authority to the Options Clearing Corporation (OCC).

According to ETF analyst Eric Balchunas, the OCC is under pressure now and will probably list these ETFs soon. At this point, only the OCC has the mandate to settle the listing of the ETF options.

Approval of these products will give Wall Street access to spot Bitcoin ETFs, increasing trading volume and potentially pushing their price.

A Look At Spot Bitcoin ETFs In The US

Unlike traditional assets, these spot Bitcoin ETFs blend the conventional features of options trading with the volatility of cryptocurrencies. Spot ETFs allow retail traders to participate in the crypto market without spending much. More importantly, they enable individual traders to quickly buy and sell their shares in the open market.

BOOM: The CFTC just dropped a notice clearing the way for spot bitcoin ETF options to be listed. This is the second hurdle they needed to clear after the SEC. Ball now in OCC’s court and they are into it, so they’ll prob list very soon. pic.twitter.com/tRiwaPpoW4

— Eric Balchunas (@EricBalchunas) November 16, 2024

The Securities and Exchange Commission (SEC) has approved the application to list these options on the CBOE and the NYSE. According to the SEC, they decided that Nasdaq’s experience with iShares Bitcoin Trust (IBIT) was successful.

Analysts see the CFTC advisory as a massive development for Bitcoin ETFs and the crypto market. If the spot BTC ETF options are listed, they will attract more investors, further legitimizing the standing of cryptocurrencies.

BTC market cap currently at $1.81 trillion. Chart: TradingView.com

Bitcoin ETF Options To Be Listed Soon?

Market experts and analysts expect these Bitcoin ETF options to be listed soon. According to Jeff Park of Bitwise Invest, these BTC ETF options will dominate the cryptocurrency market.

Park thinks the OCC will act immediately on this request but sees the end of 2004 as the most likely target for listing. However, he still believes that approval is flexible and that anything can happen.

British Hodl, a popular BTC commentator, estimates that the approval and listing will come this first quarter of 2025.

Spot ETH Options, Next?

With a growing possibility that the spot BTC ETF options will be listed, many in the industry have floated the same idea for the Ethereum blockchain. One Twitter/X user, Austin, asked if Ether would follow suit.

Austin wondered if it would be possible to re-submit a previous application today stating that Donald Trump has just be reelected as the next US president.

The SEC has already decided on ETH ETFs, saying they still need expert judgment and public comments. According to the agency, the transition of ETH into new products must comply with the country’s security laws.

Featured image from Blue Trust, chart from TradingView

Crypto markets have several US economic data to look forward to this week. The events have the potential to influence traders’ and investors’ sentiment and, therefore, trading strategies, with volatility likely to follow.

As traders position themselves for possible volatility, Bitcoin (BTC) is holding above the $90,000 psychological level as of this writing.

Initial Jobless Claims

The US Department of Labor releases weekly jobless claims data, tracking individuals applying for unemployment benefits. This week’s report, set for Thursday, Nov. 21, follows initial claims for the week ending Nov. 16 totaling 217,000. This figure came in below the expected 223,000 and marked a decrease from the prior week’s unrevised count of 221,000.

“Jobless claims (LEADING Indicator) continue to suggest the labor market is very healthy,” said $15.6 billion AUM Richard Bernstein Advisors.

The latest jobless claims figures indicate steady demand for workers, even after recent disruptions from storms and strikes. If this downward trend persists, it may signal an easing of economic challenges and a strengthening labor market. This could boost consumer spending and confidence, potentially benefiting financial markets.

When jobless claims decrease, it suggests that more people are employed or able to find work. The result is higher disposable income and increased investment in assets like Bitcoin.

S&P Global US Manufacturing PMI

The S&P Global US Manufacturing Purchasing Managers’ Index (PMI) for November is due for release on Friday. It is a key economic indicator measuring the performance and health of the US manufacturing sector. With a previous reading of 48.5 and a 48.8 consensus forecast, this metric is among the US macroeconomic indicators on the watchlist this week.

A higher PMI reading typically indicates expansion in the manufacturing industry, thus strong economic growth and increased manufacturing activity. This could boost investor confidence in the overall economy. This positive sentiment may spill over into the cryptocurrency market as investors seek higher-yield investment opportunities like Bitcoin.

In the same way, the PMI data can influence market sentiment and risk appetite among investors. Positive PMI figures may lead to a more optimistic investment environment, potentially benefiting risk assets like crypto.

S&P Global Services PMI

Another US economic data point is the S&P Global Services Purchasing Managers’ Index (PMI), due for release on Friday. This indicator measures the performance of the US services sector and provides valuable insights into economic activity and business sentiment in service industries such as hospitality, finance, healthcare, and technology.

After a previous reading of 54.1, changes in the Services PMI can also have implications for Bitcoin and the broader cryptocurrency market. A higher Services PMI reading typically signals growth in the services sector, which is a significant driver of economic activity. This could translate to positive sentiment in financial markets, potentially benefiting cryptocurrencies like Bitcoin as investors seek alternative assets with growth potential.

A strong Services PMI may also boost optimism about the business environment, leading investors to take on more risk, including investment in cryptocurrencies.

“The first indications of economic trends in the world’s major economies after the US Presidential Election will be eagerly awaited from the November flash PMI surveys, with US consumer confidence also due,” the PMI insights account noted.

Nvidia Corporate Earnings

Nvidia (NVDA), the GPU leader, is set to announce its Q3 earnings on Wednesday, Nov. 20. The report often highlights GPU demand for gaming, AI, and crypto mining. Analysts are projecting an 84% surge in revenue to $33.28 billion, largely fueled by AI infrastructure demand. Net income per share is expected to climb from $0.37 to $0.70.

Strong GPU sales for AI could boost investor confidence in AI-driven sectors, including AI-focused cryptocurrencies. Historically, Nvidia’s performance has influenced the prices of AI-related tokens, with potential bullish momentum if this week’s earnings point to continued growth in AI and crypto applications.

The sentiment surrounding AI stocks ahead of Nvidia’s Q3 earnings release is likely to have an impact on AI-focused cryptocurrencies such as Render (RENDER), Worldcoin (WLD), Near Protocol (NEAR), and Bittensor (TAO). Additionally, DePin project Aethir (ATH), known for its GPU rendering capabilities and often dubbed the “Nvidia of crypto,” may also see effects from the earnings report.

Notably, Nvidia’s results will come shortly after the US Supreme Court signaled plans for a narrow ruling in a shareholder lawsuit against the company. As previously reported by BeInCrypto, the lawsuit accuses Nvidia of misleading investors about its dependence on crypto mining revenue, which could add further volatility to both Nvidia’s stock and related crypto sectors.