VanEck has released a report highlighting the increasing adoption of Bitcoin by banks, countries, and ETFs, with these major players holding 15% of the circulating supply of the digital asset. The report reveals that these entities currently hold $175 billion worth of Bitcoins, with ETFs alone accounting for $75.4 billion of this amount.
The comprehensive report from VanEck aims to familiarize its investors with the evolution and adoption of Bitcoin over the years. It emphasizes the growing institutional interest in the asset, with ETFs, countries, and public and private companies collectively holding $175 billion worth of Bitcoins.
According to a chart in the report, ETFs hold $75.4 billion of this amount, while countries, public companies, and private companies hold $40.7 billion, $22.3 billion, and $37.8 billion, respectively. Additionally, the report highlights that these major players now hold 15% of the total Bitcoin supply in circulation.
The report also discusses the overall growth of the Bitcoin ecosystem, suggesting that Layer-2 solutions, with their stability and customization capabilities, could be the next step in boosting Bitcoin adoption. It specifically highlights the importance of the RGB protocol in the development of the crypto ecosystem.
One notable upcoming development in the Bitcoin network is the introduction of RGB as a layer 2 solution. This development is significant because it allows for the creation and management of digital assets on top of the Bitcoin blockchain. This means that assets like stocks, bonds, real estate, and even other cryptocurrencies can be issued and traded on the Bitcoin network, adding a new layer of functionality.
Furthermore, the report emphasizes the removal of technical barriers that previously hindered Bitcoin adoption. In its early days, Bitcoin was primarily held by a small group of tech enthusiasts, and its use cases were limited, with only a few merchants accepting it as payment. However, the acceptance rate has significantly increased, with more merchants and businesses now accepting Bitcoin as a form of payment. This increase in adoption is attributed to the introduction of user-friendly wallets, exchanges, and marketplaces that have made it easier for people to engage with the digital asset.
The report also highlights the growing interest in Bitcoin among institutional investors, such as hedge funds, asset management firms, and endowments. These investors recognize Bitcoin’s potential as a store of value and as a diversifier for their portfolios, particularly as an uncorrelated asset that can hedge against inflation.
Another important aspect emphasized in the report is Bitcoin’s role as a hedge against inflation. During the COVID-19 pandemic, widespread inflation eroded the purchasing power of traditional currencies. Bitcoin, on the other hand, proved to be an attractive alternative to fiat currencies, as it is not subject to the same inflationary pressures.
Unlike fiat currencies, which can be printed by governments and central banks, Bitcoin has a fixed supply, with its supply growth decreasing by 50% approximately every four years due to halving events. This limited supply makes Bitcoin an appealing option for investors concerned about the impact of inflation on their portfolios and purchasing power.
Overall, the report from VanEck provides valuable insights into the growing adoption of Bitcoin by banks, countries, and ETFs. It highlights the increasing institutional interest in the asset, the removal of technical barriers to adoption, and Bitcoin’s potential as a hedge against inflation.