jakiro
As of the beginning of this week, Bitcoin ETFs and listed companies held a total of approximately 2.57 million Bitcoins, far exceeding the 2.09 million Bitcoins held by exchanges.
This data marks that the price-sensitive inventory in the Bitcoin circulation supply has been transferred from exchanges to the institutional system, completely reshaping the market’s liquidity characteristics and risk transmission paths.
Currently, Bitcoin liquidity has formed three new “pools” with different operating logics.
The exchange pool responded the fastest. More than 2 million Bitcoins on platforms such as Coinbase can be traded within minutes, which is the main source of short-term selling pressure. However, the size of the pool has continued to shrink since 2021.
The ETF pool holds approximately 1.31 million Bitcoins (BlackRock IBIT accounts for 777,000). Its share is traded through the secondary market and requires T+1/T+2 settlement and other processes. It will flow into the spot market only after being redeemed by authorized participants. Although this kind of friction suppresses intraday fluctuations, it may accumulate the risk of redemption waves.
The enterprise pool holds more than 1 million Bitcoins (accounting for 5.1% of the circulating supply), and Strategy is the main holder. This type of funds is affected by market value losses, debt maturities, etc., and is less sticky than long-term holders but more sensitive to the capital environment.
The rise of ETFs has also restructured the derivatives market.Institutions conduct basis arbitrage by “buying ETFs and selling futures”, which promotes the expansion of open positions in CME Bitcoin futures. The basis has become an arbitrage signal rather than a direction indicator.
The investigation agency pointed out that the large-scale fund outflow of ETFs in mid-October was actually the liquidation of basis arbitrage, not the withdrawal of institutions. This mechanical operation makes the interpretation of capital flows more complicated.
At the same time, market volatility has been significantly compressed, with Glassnode data showing that Bitcoin’s long-term actual volatility has dropped from 80% to 40%.
The average daily trading volume of ETFs is billions of dollars, attracting compliant funds. Institutions balance funds as planned instead of panic selling. The spreads between market makers have narrowed, and spot liquidity has increased.
However, the compression of volatility does not mean the elimination of risks. The chips are concentrated in ETFs and companies. The impact of a single large-scale redemption or liquidation is far greater than that of retail transactions.
The new structure also hides new risks. Most companies allocate BTC through debt issuance. If the price falls below the cost line and credit tightens, it may trigger forced selling; although ETFs have no refinancing pressure, continued redemptions will still lead Bitcoin back to the exchange, which only delays rather than eliminates selling pressure.
Nowadays, the largest holders of Bitcoin have changed from giant whales to listed companies and compliance funds, and the selling pressure has changed from the reaction of retail investors to the market to the capital impact of institutions.
This change has compressed daily fluctuations, but created new tail risks, which means that the Bitcoin market has entered a new stage dominated by institutions. The trading logic needs to be completely updated, and it also requires us to re-focus on some data.
