Where Are All The Bitcoins?

Holding of BTC in major treasuries are increasing sharply, and the trend may only be getting started.

What will bitcoin Treasury holdings look like in another year?

Much has been made of the new ETFs and their insatiable demand for BTC, but for now, institutional holders actually control a relatively small percentage of the total supply of Bitcoin.

All told, a little over 2 million BTC is held as "Treasury assets" by institutions, public and private companies, and the occasional nation state. But that is now changing—and fast.

Treasury Holders

Swan, a Bitcoin company that makes it easy to stack sats, and which provides educational content, has created the following image, which shows the number of BTC held by various major entities.

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Swan's Managing Director writes:

Dumb money is focused on the fact that #BTC has declined since the ETFs were approved. Smart money is focused on the fact that BTC is being taken out of liquid supply by large institutions.

I frequently check the http://BitcoinTreasuries.net website. For the two years I have been tracking it, the amount of BTC on corporate treasuries (which includes governments, pubcos, private companies, and ETFs), has remained within a few basis points of 8%.

But that will not be the case for long. "Now that the ETFs are trading, they are hoovering up bitcoin so rapidly that the chart of BTC held in treasuries has gone vertical. The percentage jumped >20% in a week, from 8% to 10.3%."

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"In a matter of days, an additional 2.3% of the supply has been locked away. Removed from circulation, so to speak. Unlikely to see the light of day ever again. This is, of course, the dynamic that will precede the impending supply shock."

"Removed From Circulation"?

Roughly 28,000 BTC have been accumulated by the ETFs since launch: 94,000 BTC in new demand, minus the 66,000 BTC outflows from Grayscale. Anecdotally, a relatively small percentage of the Grayscale outflows are finding a new home in a different ETF, which means that demand is strong (it's not just churn).

28,000 is not much in the grand scheme of things. It's around 1.5% of the BTC held on exchanges, or 0.13% of all bitcoins. On the other hand, that source of demand has only been there for seven days. Institutional holdings are set to get a lot bigger in the coming weeks.

However, we disagree that these BTC are "unlikely to see the light of day ever again". They're not locked away forever. Institutions, and the individuals who use them, are just as averse to losing money as anyone else. If bitcoin puts in another steep correction or bear market, there will be plenty of customers who seek to trade that or lose their nerve.

The real story here is that bitcoin is going mainstream. The financial implications of that have not yet started to be explored.


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