TLDR:
ETFs and DATs held 12% of Bitcoin supply by end of 2025, exceeding new supply absorption.
Sovereign holdings now include 325,437 BTC in the U.S. Strategic Bitcoin Reserve.
Bitcoin drawdowns remain below 50% in the current cycle, reflecting deeper market liquidity.
ETFs reached adoption levels in under two years that gold ETFs took over 15 years to achieve.
Bitcoin is increasingly viewed as a strategic asset for institutional investors.
Spot ETFs, corporate treasuries, and sovereign holdings absorbed more supply than miners produced in 2025. The U.S. Federal Reserve’s early rate cuts and monetary easing have increased demand for scarce digital assets.
Regulatory clarity, including the U.S. CLARITY Act, supports broader adoption across traditional financial platforms.
Structural Demand and ETF Expansion
Spot Bitcoin ETFs reshaped the supply-demand balance, absorbing 1.2 times the newly mined supply and recirculated coins in 2025, according to ARK Invest data.
By year-end, ETFs and digital asset treasuries (DATs) controlled over 12% of bitcoin’s total supply. Morgan Stanley and Vanguard expanded access to regulated Bitcoin products, including ETFs, creating a bridge to traditional capital pools.
Even amid a major October liquidation and market volatility, ETF growth outpaced supply expansion, reflecting stronger structural demand.
Corporate adoption also expanded, with S&P 500 and Nasdaq 100 indices including bitcoin-exposed companies like Coinbase and Block. Digital asset treasury firms now hold over 1.1 million BTC, representing 5.7% of total supply, mostly long-term holdings.
Strategy, formerly MicroStrategy, maintains 3.5% of bitcoin’s total supply as a treasury reserve. Sovereign involvement increased, highlighted by the U.S. Strategic Bitcoin Reserve holding approximately 325,437 BTC, or 1.6% of supply.
The expansion of regulated vehicles and institutional demand coincides with regulatory progress. The CLARITY Act aims to define the lifecycle of digital assets and streamline oversight between the SEC and CFTC.
Texas and other states continued state-level Bitcoin adoption, further signaling government acceptance. Clear guidelines support allocation by institutional investors, strengthening bitcoin’s role as a macro instrument.
In our view, four trends are increasing bitcoin’s value proposition:
The macro and policy backdrop shaping demand for scarce digital assetsStructural ownership trends across ETFs, corporates, and sovereignsBitcoin’s relationship to gold and the broader store-of-value… https://t.co/MDbtUxbJkV
— ARK Invest (@ARKInvest) February 17, 2026
Bitcoin’s Relationship to Gold and Market Maturity
Historically, Bitcoin has followed gold’s lead during macro shocks. In 2025, gold surged 64.7% amid inflation concerns, while Bitcoin declined 6.2%, echoing patterns seen in 2016 and 2019.
ETFs indicate growing confidence in Bitcoin as a store-of-value, achieving in two years what gold ETFs required 15 years to reach. Weekly correlation data show low alignment between Bitcoin and gold, suggesting Bitcoin can diversify portfolios independently of traditional assets.
Market volatility is declining, with drawdowns from record highs under 50% since 2022, compared to 70–80% in prior cycles.
Time-in-market strategies continue to outperform timing-focused approaches, with hypothetical investors from 2020–2025 gaining 29–61% despite corrections. These trends suggest Bitcoin is maturing from a speculative asset into a liquid macro instrument with robust trading infrastructure.
Long-term holders, including ETFs, corporations, and sovereigns, now absorb a meaningful portion of new supply. With regulatory clarity and growing institutional access, Bitcoin is increasingly recognized as a strategic allocation rather than an optional investment.
Low correlations with traditional assets and diminished volatility reinforce its potential to improve portfolio risk-adjusted returns.
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