- VanEck discloses the growing adoption of Bitcoin with Banks, countries, and ETFs holding 15% of the asset’s circulating supply.
- According to the report, these big players hold $175B worth of Bitcoins with ETFs alone having $75.4 billion of this amount.
US asset manager VanEck, in a comprehensive report meant to introduce its investors to Bitcoin, has delved into the significant evolution and the considerable adoption of the asset over the years. In the report, VanEck disclosed the growing institutional interest with approximately $175B worth of Bitcoins held by ETFs, countries, and public and private companies.
In a chart captured in the report, VanEck explained that ETFs hold $75.4 billion of this amount, with countries, public companies, and private companies holding $40.7 billion, $22.3 billion, and $37.8 billion respectively. Also, the big players reportedly hold 15% of the total amount of Bitcoin in circulation.
Commenting on the overall growth of the ecosystem, the report stated that the stability and customization abilities of Layer-2s may be the next step in boosting Bitcoin adoption. In addition to that, it highlighted the importance of RGB protocol in the overall development of the crypto ecosystem.
One notable upcoming layer 2 development on the Bitcoin network is RGB. This development is important because it enables the creation and management of digital assets on top of the Bitcoin blockchain. Assets such as stocks, bonds, real estate, or even other cryptocurrencies can be issued and traded on top of the Bitcoin network, adding a new layer of functionality.
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The Adoption of Bitcoin Facilitated by the Removed Technical Barrier
The report also highlights the acceptance rate of the asset in its early days when its holders were primarily made up of a small group of tech enthusiasts. At that time, the asset had a few use cases with just a small number of merchants accepting it as payment. However, the acceptance rate has increased drastically with several merchants and businesses accepting it as a form of payment. According to VanEck, the technical barriers of entry in the early days have been removed by the introduction of friendly wallets, exchanges, and marketplaces.
Bitcoin interest among institutional investors has also increased. Hedge funds, asset management firms, and endowments are increasingly recognizing bitcoin’s potential as a store of value and as an effective portfolio diversifier, specifically, when looking through the lens of an uncorrelated asset that has the potential to hedge against inflation.
Another important area highlighted in the report is its role as a hedge against inflation. As stated, the COVID-19 pandemic led to widespread inflation eroding the purchasing power of currencies. At that time, it was observed that Bitcoin was the most attractive option to fiat since it is not subject to the same inflationary pressure.
Unlike fiat, which can be printed by governments and central banks, bitcoin has a fixed supply, with supply growth decreasing by 50% roughly every 4 years with the halving events. Bitcoin is not subject to the same inflationary pressures caused by fiat money supply growth, making it an attractive option for investors concerned about the impact of inflation on their portfolios and their subsequent purchasing power.