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New analysis from CryptoQuant has determined that 2024 has been a “defining year” for institutional Bitcoin adoption, thanks to the exchange-traded funds (ETFs). Corporate investment has surged all over the sphere, increasing realized capitalization by $300 billion.
However, the report also noted that Bitcoin’s technical gains played a back seat this year, with institutions completely dwarfing protocols like Runes.
The ETF Wave Into Bitcoin
CryptoQuant’s latest weekly report, shared with BeInCrypto, tracks the rise of institutional adoption in 2024. The Bitcoin ETF received SEC approval in January, which began a wild spree of corporate investment. Since the beginning of the year, Bitcoin’s realized capitalization jumped from $430 billion to $730 billion.
Bitcoin Capitalization Since ETF Approval. Source: CryptoQuant
The issuers alone have caused much of this capitalization. For example, Bitcoin ETF issuers were buying five times as much BTC by late October as the global hash rate. BlackRock alone holds more than $500,000 in Bitcoin, and the ETF market is soaring. On-chain intelligence firm Arkham noted that the company purchased $1 billion in Bitcoin by Wednesday this week.
Nonetheless, analysts stressed that Bitcoin ETFs aren’t the only factor. The ETFs give large institutions an easy way to gain Bitcoin exposure, but they’ve also provided a stamp of legitimacy. Major companies are also buying Bitcoin themselves, totally circumventing the ETFs:
“Corporate accumulation surged, with MicroStrategy increasing its holdings from 189,000 to 402,000 Bitcoin, becoming the largest corporate holder. Companies like Marathon Digital followed suit, reflecting a broader trend of corporations adopting Bitcoin as a strategic reserve asset, further boosting institutional demand,” the report claimed.
Both of these companies, MicroStrategy and Marathon, have also led Bitcoin purchases. Earlier this week, the companies spent $1.5 billion and $700 million on BTC acquisition, respectively. The report claimed that these massive buys “enhanced Bitcoin’s liquidity, stability, and credibility.” Exchanges and other industry firms benefited massively from this trend.
The report has identified several places where Bitcoin has taken off with institutions in 2024. However, it is somewhat jarring to note that the asset’s technical capacities have gone largely unremarked. The firm said that the Runes protocol helped fuel interest in several sectors, but it had little noticeable impact on the total market.
CryptoQuant claimed that some Runes tokens nearly reached $1 billion in market capitalization this year. However, industry commentators have worried that the ETFs could open a wave of “de-decentralization,” permanently transforming Bitcoin into a speculative asset.
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