US Bitcoin ETFs: 15% of BTC Spot Trading

In a recent report by Coinbase analysts David Duong and David Han, they argue that focusing on spot Bitcoin exchange-traded funds (ETFs) may be diverting attention from more important trends in the crypto market. Despite the hype around spot Bitcoin ETFs, the analysts point out that they only account for a small portion (10-15%) of the total Bitcoin spot trading volume across centralized exchanges (CEX) globally. These ETFs hold approximately 3% of the outstanding Bitcoin supply.

According to CoinMarketCap, Bitcoin’s spot trading volume reached $29.5 billion in the past 24 hours. On Feb. 8, 10 spot Bitcoin ETFs traded around $1.3 billion, representing about 4.4% of the total Bitcoin traded on CEXs in the same period.

The Coinbase analysts believe that there are more significant trends emerging in the crypto market following the launch of spot Bitcoin ETFs. One of these trends is the growing activity in decentralized finance (DeFi), which they believe could enhance the value proposition for Ethereum. As over half of the total DeFi value remains locked on the Ethereum blockchain, the analysts see ETH’s strength as one of the key themes in the industry, along with DeFi growth and selling pressure on Bitcoin miners as the halving approaches.

The analysts predict that the upcoming Bitcoin halving in April could negatively impact mining economics, potentially leading to increased sell pressure on miners. This could result in narrower margins and less excess profit retained in Bitcoin. The study notes that the impact of miner selling may not be immediate.

In recent years, the activity in DeFi has experienced a decline since reaching its peak in October 2021 with a total value locked (TVL) of over $200 billion. In 2024, the DeFi TVL has been picking up again, rising 18% from $55 billion on Jan. 1 to $65 billion at the time of writing.

Alongside the growth in DeFi, the price of ETH has also seen significant increases this year. It has grown 7% from $2,350 on Jan. 1 to $2,510 at the time of writing. Ryan Berckmans, an Ethereum community member and investor, believes that Ethereum’s switch from a proof-of-work to a proof-of-stake consensus mechanism could drive ETH’s price as high as $27,000 during the bull cycle.