How important are Bitcoin ETFs? Glassnode investigations

US Bitcoin spot ETFs have taken in $12.3 billion in net income since their launch three months ago. How much have they affected the broader Bitcoin market?

Lead Glassnode analyst James Cheek presented an analysis on Wednesday measuring the impact of Bitcoin ETFs next to the asset's futures and spot markets – using on-chain data.

Gray scale and long term containers

The analyst began by examining the Greyscale Bitcoin Trust (GBTC) – the only new Bitcoin ETF – which has seen massive and consistent inflows since January 11th.

The fund has since lost approximately 300,000 BTC, nearly half of its total holdings. However, the rising value of BTC on the balance sheet has reduced net assets from $28.7 billion to just $23.1 billion, leaving much more room for sell-side pressure from the fund.

“GBTC is going to be classified as a long-term collateral offering,” Czech said. Most of the coins in the fund are owned by older investors who bought shares at a much lower price than their competitors, meaning they have more incentive to sell when the price of Bitcoin rises.

“It's still working in the way that long-term holdings supply,” he continued. This is a pattern we have seen in every previous Bitcoin cycle.”

Bitcoin ETFs: One third of the market

Last month, Glassnode reported that the distribution of BTC from long-term Bitcoin holders – defined as those who have held their coins for more than five months – reached levels similar to previous bull runs. The analyst says GBTC now accounts for about a third of long-term bond costs in recent months.

Looking at other Bitcoin ETFs, he compared their net income to the change in Bitcoin's “realized cap” — an indication of how much on-chain capital has flowed into the Bitcoin network. ETF inflows reached $28.5 billion, while the overall network recorded capital inflows of $52 billion.

According to Voice, Czech ETFs are similarly 40% to 50% as large as the traditional Bitcoin spot market. Futures still dominate both sectors, representing on average 80% to 85% of Bitcoin transactions.

“If we look at it in terms of trading volume … long-term owner expense … or ETF income … we're talking about something on the order of thirty to fifty percent,” Cheek concluded regarding the size of ETFs.