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Bitcoin ETFs Surpass MicroStrategy in BTC Holdings, Post-GBTC Conversion

In a significant turn of events in the cryptocurrency market, the newly introduced spot bitcoin ETFs, with the exception of Grayscale's GBTC, witnessed an impressive surge of nearly 5,000 additional tokens in their portfolios on Wednesday. Currently boasting a collective holding of over 192,000 BTC, these ETFs have outpaced MicroStrategy (MSTR), whose bitcoin reserves stood at 190,000 by the close of January.


Despite being on the market for less than a month, these ETFs have already garnered massive attention, attracting billions of dollars from investors eager to tap into the bitcoin market without the hassle of direct ownership and storage. A staggering influx of over $1 billion was recorded in these ETFs on Wednesday alone, according to insights from Bloomberg Intelligence.


Notably, these figures exclude Grayscale's GBTC, which commenced trading as a spot product alongside the other ETFs. Having operated as a closed-end trust for several years, GBTC started its spot ETF journey with approximately 630,000 bitcoins. However, recent months have seen tokens exiting GBTC, driven by profit-taking motives or a quest for reduced fees, resulting in the fund currently holding just over 470,000 bitcoins.


Markus Levin, the head of operations at California-based tech startup XY Labs and co-founder of XYO, highlighted the evolving distribution dynamics within the bitcoin network. While acknowledging the risk of excessive concentration of BTC in specific entities or jurisdictions, Levin argued that the current scenario, even with entities like MicroStrategy and these ETFs, poses no threat to the integrity of the Bitcoin Network.


With a finite supply of 21 million bitcoins dictated by the cryptocurrency's code, the ETF issuers (excluding GBTC) – encompassing asset management behemoths like BlackRock, Fidelity, and VanEck – now collectively hold approximately 1.8% of the total bitcoin supply. Incorporating GBTC's 470,000 tokens elevates this percentage to 4%, reflecting a notable stake in the cryptocurrency landscape.

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