Declining Interest in Bitcoin Spot ETFs: Blame Memecoin Frenzy?

• BTC supply absorption by spot ETFs has turned negative.
• This suggests a temporary decline in interest in BTC spot ETFs.

The recent decline in Bitcoin (BTC) absorption of supply by Bitcoin spot exchange-traded funds (ETFs) has indicated a decline in interest in this asset class.

This was reported by pseudonymous CryptoQuant analyst Oinonen_T in a new report.

BTC ETF sees slight decline in spot market

BTC supply absorption by BTC ETFs tracks the rate at which these funds acquire or absorb newly mined coins.

This metric is important as further supply absorption by spot ETFs could put upward pressure on BTC prices.

Conversely, a decrease in demand may indicate a possible decrease in the value of the leading currency.

Oininen_t observed that the coin’s supply absorption recently turned negative and dropped to a low of -0.38. Confirming the previous position, the analyst said:

“Despite the hype about the upcoming halving in 21 days, the spot price of Bitcoin has not changed dramatically over the past 30 days. One explanation for the stagnant price action is negative supply absorption by ETFs.”

The analyst said that when spot ETFs are unable to absorb newly minted coins,

“Demand for the approximately 900 bitcoins issued daily must come from other sources.”

However, in the current market, retail investors who typically hoard these coins have turned their attention to meme coins.

In recent weeks, the values ​​of some Solana (SOL) meme-based meme coins have increased by triple digits, leading to a significant increase in the market capitalization of meme coins.

Read Bitcoin (BTC) Price Prediction 2024-25

According to oininen_t,

“While retail investors have shown increasing interest in Bitcoin, their attention may be focused on new Solana-based tokens and “meme coins.”

Concluding that negative supply absorption is a temporary hurdle in the ETF spot market, the analyst said:

“The overall outlook still looks promising. In a multi-year scenario, I see Bitcoin attempting to reach market cap parity with gold, which would mean a 1,000 percent increase over the current spot price.

Since its launch, Bitcoin Spot ETF volumes have increased significantly. At $182 billion at press time, the daily cumulative volume of this asset class has increased by more than 3,500%.

With assets under management (AUM) of $24 billion, Grayscale Bitcoin Trust (GBTC) currently has the largest market share in the BTC spot ETF market.

This is an automatic translation of our English version.