Compass Investments

– BTC supply consumption by spot ETFs has turned negative.

This indicates a temporary decline in interest in spot ETFs.

‘The recent decline in bitcoin [BTC] supply uptake by spot bitcoin exchange-traded funds (ETFs) indicates a waning interest in this asset class.

This was noted by CryptoQuant’s pseudonymous analyst Oinonen_t in a new report.

BTC ETF supply absorption rates track the rate at which newly mined coins are bought or absorbed by these funds.

This metric is important because an increase in supply absorption by spot ETFs can lead to an increase in the price of BTC.

Conversely, a decrease in demand can cause the value of top coins to fall.

Oininen_t found that the coin’s supply absorption recently turned negative, falling to a low of -0.38. Confirming the above position, the analyst made the following observations

Despite claims that the bitcoin price will halve in 21 days, the bitcoin spot price has not changed significantly over the past 30 days. One explanation for the price drop is negative ETF supply absorption.”

The analyst added that if spot ETFs are unable to absorb newly mined coins

“Demand for the roughly 900 bitcoins issued daily will have to come from other sources.

However, in the current market, retail investors who normally stockpile these coins are shifting their interest to meme coins.

In the past few weeks, the value of Solana-based [SOL] meme coins has tripled, and the market capitalization of meme coins has increased significantly.

According to _Oininen_.

Private investors are increasingly interested in bitcoin, but their attention may be focused on new tokens and Solana-based “meme coins.”

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

The overall picture still looks promising. In a multi-year scenario, we see bitcoin equaling gold in terms of market capitalization and growing by 1000% over the current spot price.”

Since its launch, trading volumes in the bitcoin spot ETF have grown significantly. At the time of publishing this article, it had a balance of $182 billion and the cumulative daily trading volume in this asset category has increased by more than 3,500%.

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