- Wall Street’s adoption of spot ETFs significantly influences Bitcoin’s growth, though the new millionaire creation pace has slowed.
- Bitcoin’s value has surged 70% this year, following a 155% increase from last year’s low, hinting at early bull market stages.
- Fewer than 2,000 new Bitcoin millionaires are being created daily, with potential reasons including delayed new capital and whales taking profits.
The current upward trend in bitcoin (BTC) is significantly influenced by Wall Street’s adoption of the much-anticipated spot exchange-traded funds (ETFs). Although this surge is generating new “millionaires,” the pace at which wealth is being created is not as rapid as it was during the 2020-2021 rise.
Bitcoin, the most valuable cryptocurrency in terms of market capitalization, has seen a 70% increase in value this year, reaching unprecedented peaks of over $72,000. This growth comes on the heels of last year’s impressive 155% climb from the lows of a harsh bear market.
Data from the Paris-based firm Kaiko shows that currently, fewer than 2,000 new millionaires, or wallets holding at least $1 million in Bitcoin, are being created each day. This figure is significantly lower compared to the previous surge in bitcoin’s value, which saw the creation of more than 4,000 millionaire wallets daily, including over 2,000 wallets accumulating balances of $10 million each day.
This more gradual pace of wealth creation might suggest that the current bull market is still in its initial phases, with the peak of investment inflows yet to come. This interpretation aligns with the broader market expectation that bitcoin’s price could climb to $150,000 or more in the near future, driven by ongoing investments into spot ETFs and a reduction in supply anticipated from the upcoming halving event.
“This [slower growth rate of millionaires] could be due to a few things: (1) New capital has yet to arrive in full force. (2) Large whales are taking profit as BTC hits new highs. (3) Whales are storing their holdings with custodians, rather than personal wallets.”
Kaiko
Kaiko, in their weekly newsletter, outlined several possible reasons for the slower rate at which new bitcoin millionaires are being created: (1) The influx of new capital into the market might not have reached its full potential yet. (2) Significant investors, or “whales,” may be cashing out some of their holdings as bitcoin reaches new peak values. (3) Instead of managing their assets in personal wallets, whales might be opting to keep their bitcoin with custodial services.
Additionally, there has been a noticeable increase in the disparity between the liquidity for buy (bid) and sell (ask) orders within 2% of the current market price, expanding to almost five times the usual level. This suggests a growing accumulation of limit orders on the selling side, indicative of investors aiming to lock in profits at or near these record-breaking price levels.
