Since the launch of Bitcoin ETFs by companies like BlackRock, Fidelity, and Grayscale, the cryptocurrency market has undergone significant changes. Institutional investors have gained new access to Bitcoin, while self-custody has become less popular.
Impact of Bitcoin ETFs on the Market
The launch of Bitcoin ETFs by leading financial players has significantly affected the cryptocurrency market, making ETFs the primary access point for institutional and retail investors. Substantial inflows into these funds, particularly increasing BlackRock's AUM to $83 billion, have also contributed to the holding of over 700,000 BTC.
Changes in Self-Custody
Since early 2024, there has been a decline in the growth rates of self-custody. According to analyst Willy Woo, "Since spot ETFs became available, the growth rate of self-custody users has been in decline." This indicates a shift of control over Bitcoin assets to institutional custodians, raising questions about trust in personal control of assets.
Future of Bitcoin and Other Cryptocurrencies
Emerging trends in the Bitcoin market also suggest potential changes in dynamics for other cryptocurrencies. Active Bitcoin addresses have sharply declined from 1 million to 650,000, levels not seen since 2019. This situation suggests further institutional dominance over the management of digital assets. Comments from Dan Held highlight the individual choice between asset control and trust in institutional custodians: "It’s about the individual decision of having an asset in your control or not."
Thus, the rise of Bitcoin ETFs is changing the structure of the cryptocurrency market, emphasizing the importance of institutional control. These changes may have far-reaching implications not only for Bitcoin but for the entire cryptocurrency space.
