Old Bitcoin Supply Flows into ETFs: Three Waves Signal Market Transformation
Bitcoin's journey into mainstream investment vehicles continues, as on-chain data reveals three distinct waves of veteran holders reallocating their long-dormant assets into spot Exchange-Traded Funds (ETFs) since their US launch in January 2024. This significant shift suggests a fundamental market transformation, bridging the gap between traditional finance and the cryptocurrency world.
ETF Inflows Drive Bitcoin's Market Dynamics
The introduction of Bitcoin spot ETFs has provided a convenient entry point for investors less familiar with direct cryptocurrency ownership, attracting substantial capital. Data from CryptoQuant analyst Maartunn highlights periods of particularly sharp inflows into these ETFs, reflecting robust demand. These investment vehicles allow indirect exposure to Bitcoin, with funds acquiring the underlying asset on behalf of clients, thereby causing on-chain movements into ETF-associated wallets. These inflows have been a critical factor in the market's recent growth, despite periods of calm and fluctuating demand.
Veteran Holders Fueling the Shift: The CDD Connection
A crucial insight into these movements comes from the "Coin Days Destroyed" (CDD) metric. CDD measures the aggregate "age" of Bitcoins being moved, with spikes indicating activity from long-term holders – often referred to as "diamond hands." These holders patiently accumulate coin days, and their eventual movement of tokens results in large-scale CDD destruction. The analysis reveals a compelling pattern: the three major Bitcoin ETF net inflow waves observed in Summer 2024, Fall 2024, and Summer 2025 were each accompanied by distinct distribution signals from the CDD. This strongly implies a rotation of Bitcoin supply, moving from these veteran hands to meet the fresh demand channeled through the newly established ETF products.
Current State and Future Implications
Following the most recent wave of inflows, the Bitcoin ETF netflow has stabilized at a neutral level, indicating a cool-down in immediate demand. Experts like Maartunn emphasize the vital role of sustained ETF inflows, warning that "without strong new demand, selling pressure from new holders could increase." This suggests that while veteran holders have been instrumental in supplying liquidity to the ETFs, continuous fresh capital will be essential to counteract potential selling pressure and maintain upward momentum for Bitcoin, currently trading around $110,500.
