As of December 8, Bitcoin ETFs hold 1,495,160 BTC and listed companies hold 1,076,061 BTC. In total, this amounts to approximately 2.57 million BTC, significantly more than the 2.09 million BTC held on centralized exchanges.
Of the 19.8 million Bitcoins in circulation, the most price-sensitive inventory has migrated from exchange wallets to structures that respond to different incentives, operate under different regulatory constraints, and mobilize capital on different timelines.
This change is more than just a change in ownership. This is a structural shift in how supply moves, how basis trading works, and how volatility behaves when marginal sellers are no longer retail traders on Binance, but instead become regulated funds, corporate treasury departments, or institutional custodians managing billions of dollars of customer commissions.
The old mental model of Bitcoin liquidity assumed that exchanges were the dominant repository of selling pressure.
Traders deposited coins, market makers quoted spreads, and drawdowns occurred when order book inventory took a hit. That framework still applies, but now accounts for a shrinking share of the ecosystem.
Foreign exchange balances have been steadily shrinking since early 2024, while ETF holdings and custody by institutional investors have expanded.
According to a recent study by Glassnode and Keyrock, more than 61% of Bitcoin supply has not been moved in over a year, indicating a market where effective float is shrinking even as total supply is increasing.
The question is not whether this matters for price formation, but how to map the new plumbing and what risks arise when a rapidly growing Bitcoin warehouse is a balance sheet structure tied to stock markets, debt maturity calendars, and monthly NAV adjustments.
3 pool system
Bitcoin’s liquid supply is currently split into three pools with different mobilization logics. Exchange floats are the most reactive.
Coins stored in hot wallets on Coinbase, Binance, or Kraken can reach bids in minutes, and traders who deposit for leverage or speculative positions represent the fastest selling pressure.
That pool has been shrinking for years, going from a multi-million BTC level in 2021 to just over 2 million BTC now, according to Coinglass data.
ETF float is growing, albeit slowly. The US Spot Bitcoin ETF held approximately 1.31 million BTC as of early December 2025, and BlackRock’s IBIT alone accounts for approximately 777,000 BTC per Bitcoin Treasury.
Because ETF shares are traded in the secondary market, price discovery occurs through the creation and redemption of shares rather than direct spot sales. Authorized participants perform arbitrage between the ETF’s stock price and net asset value, a process that includes T+1 or T+2 settlement, custodian adjustments, and regulatory reporting.
As a result, Bitcoin held by the ETF will not hit the spot order book unless the AP redeems it physically and moves the coins to the exchange. This friction suppresses reflex selling during intraday volatility, but can also amplify moves as redemption waves build.
Corporate bonds and treasury float are factors that cause fluctuations. Listed companies currently hold over 1 million BTC, with Strategy’s tranche accounting for the majority.
According to Bitcoin Treasuries, listed companies collectively hold about 5.1% of the BTC supply, and a drawdown could swamp some government bonds, raising the possibility of forced or opportunistic sales in a stressed environment.
Corporate shareholders face different pressures than ETF shareholders. They report loss of revenue due to mark-to-market, debt repayments on a fixed schedule, and responses to equity analysts who model Bitcoin exposure as balance sheet risk.
If Bitcoin falls 30%, leveraged corporate treasuries won’t just lose paper value. It faces margin calls, refinancing constraints and board oversight.
As such, a company’s free float is less sticky than the supply of long-term holders, but it is more sensitive to capital market conditions than pure exchange stocks.
base and carry machine
The ETF launch cycle also reshaped the Bitcoin derivatives market.
CME Group’s commentators explain basis trading and how spot ETFs and futures work. Buy spot ETF stocks, short CME Bitcoin futures, and understand the spread between spot and futures prices.
The same CME analysis shows that after the spot ETF launch, leveraged funds increased their net short positions in CME Bitcoin futures, consistent with hedge carry rather than outright bearishness.
Open interest widened from 2024 to 2025 as institutional desks built positions, and basis action signaled arbitrage positioning rather than pure directional sentiment.
This is important when interpreting ETF flows. A recent commentary in Amber Data argues that the large-scale headline outflows since mid-October have been concentrated and consistent with an unwinding of basis arbitrage rather than a unified institutional exit.
When basis compresses or funding rates turn negative, carry trades lose their edge and desks relieve tension by redeeming ETF shares to cover futures shorts. While the result may look like institutional selling in the flow data, the underlying factors are mechanical rather than long-term belief changes.
ETF plumbing now links spot demand to derivatives positioning, complicating a clean story about “smart money” inflows or outflows.
Volatility compression and deeper liquidity
According to a partner note from Glassnode and Fasanara, Bitcoin’s long-term realized volatility has nearly halved over the cycle, dropping from the mid-80s to the low 40s.
The same analysis points to billions of dollars in daily ETF trading volume and a market structure that is significantly different from previous cycles.
A regulated wrapper brings in allocators who do not touch spot Bitcoin on offshore exchanges, and those allocators bring execution discipline, risk limits, and compliance infrastructure, smoothing out some of the wild price swings that defined previous cycles.
Spot liquidity is deepening as market makers estimate narrower ETF NAV spreads, and the presence of institutional buyers rebalancing on a schedule rather than panic selling based on headlines creates more stable bidding during drawdowns.
But volatility compression is not the same as stability.
Whether in ETFs, corporate bonds, or whale wallets, Bitcoin’s concentration in a small number of large holders means that one large wave of liquidations and redemptions can move the market more than ever before diffused retail.
In April 2025, the Chairman of the Swiss National Bank rejected Bitcoin as a reserve asset due to volatility and liquidity criteria, a reminder that even as market structures mature, asset movements under stress still do not meet the standards required for central bank reserve management.
What happens when the Treasury faces stress?
The corporate financial model for Bitcoin accumulation assumes price appreciation and access to cheap equity or debt financing.
The strategy’s strategy of issuing convertible debt, buying Bitcoin, and covering the dilution and interest expense with Bitcoin’s rise in value works in bull markets when borrowing costs are low.
If Bitcoin falls below a company’s average cost standard and the credit market tightens, it will collapse.
The same logic applies to small corporate holders or any entity that leveraged to buy Bitcoin, assuming the price continues to rise.
ETFs do not face the same refinancing risk, but they do face redemption risk.
If outflows continue due to a sustained bear market, Authorized Participants will redeem their shares and return Bitcoin to the market through spot sales or custodian transfers that ultimately reach the exchange.
The buffer provided by the ETF structure delays the transmission of selling pressure by days or weeks, but does not eliminate the pressure. Instead, just change the timing and execution path.
As a result, while ETFs reduce day-to-day volatility by moving coins away from exchanges, they cannot prevent significant drawdowns.
These redistribute selling pressure across time and market participants, but the coin still exists and the selling incentive is still responsive to price.
Ledgers don’t disappear, they get rebalanced
This data supports the reclassification of Bitcoin’s liquid supply map and is not an argument that supply constraints guarantee price increases.
Glassnode’s term “anchor float” refers to the actively traded portion of the supply and the portion sitting in long-term holders’ wallets, corporate balance sheets, or ETF vaults.
As exchange floats shrink and ETF and corporate floats grow, marginal pricing trades occur across venues with different microstructures, latencies, and participant profiles.
Basis trading brings spot and derivatives markets closer together. Corporate treasuries link Bitcoin volatility to stock market stress and credit conditions.
Regulated funds not only attract capital that would otherwise have no impact on assets, they also introduce redemption mechanisms that can amplify moves when sentiment changes.
The shift from exchange-driven supply to custodian- and Treasury-driven supply changes selling pressure from continuous and reflexive to temporary and capital market dependent.
Realized volatility under normal circumstances is compressed, but tail risk is not eliminated. This not only creates new arbitrage opportunities and new sources of demand, but also new vulnerabilities related to leverage, regulation, and institutional risk management.
The Bitcoin ledger now reflects a market where the largest holders are not anonymous whales or early adopters, but custodians managing billions of dollars on behalf of publicly traded companies, registered investment products, and institutions.
It’s a different beast and a different way of trading.
