Rising demand for the world's largest cryptocurrency by market cap, thanks to the surging popularity of spot bitcoin ETFs, is having a profound impact on the market.

"While 900 bitcoins are produced daily, the newly issued US ETFs are demanding 2,800 bitcoins per day," CoinShares's Head of Research James Butterfill told The Block. "This has led to a 28% reduction in exchange holdings since 2020, indicating a market experiencing a significant demand shock.”

On Wednesday, as spot bitcoin ETFs once again broke a daily trading volume record, the price of the cryptocurrency whipsawed around the $60,000 mark. Bitcoin has surged approximately 40% in the past month, coinciding with the start of spot bitcoin ETF trading on January 11

With bitcoin briefly hitting $64,000 on some exchanges …