Bitcoin exchange-traded products have achieved a significant milestone by amassing a collective holding of over 1 million BTC globally, signaling a substantial surge in institutional interest in the leading cryptocurrency. These investment vehicles, designed to either mirror the price movements of Bitcoin or provide investors with exposure to the digital asset, have seen a meteoric rise in adoption since their inception.

The emergence of spot Bitcoin ETFs in the United States in mid-January marked a pivotal moment, with 11 ETFs collectively acquiring a staggering 855,619 Bitcoin, averaging an impressive daily accumulation of 6,200 BTC. However, the trend extends beyond the U.S., as an additional 21 Bitcoin exchange-traded products offered in various countries, including Canada, Germany, and Brazil, have contributed to the global tally, bringing the total to 1,002,343 BTC, equivalent to an estimated $68 billion.

This accumulation represents approximately 5.08% of the current circulating supply of Bitcoin, which stands at 19,704,484 coins according to CoinGecko. Notably, Grayscale's GBTC remains a dominant player in the market, holding 289,040 coins valued at approximately $19.9 billion. Nevertheless, BlackRock's iShares Bitcoin Trust (IBIT) is rapidly closing the gap, boasting 287,168 BTC worth around $19.8 billion, potentially poised to overtake GBTC in the near future if the current inflow-outflow dynamics persist.

Despite the surge in institutional investment through ETFs, concerns have been raised regarding the impact on self-custodied Bitcoin holdings. HODL15Capital's recent analysis highlights a stagnation in the growth of Bitcoin held in self-custody addresses from 2023 to 2024. This observation prompts speculation about whether the proliferation of ETFs is diverting funds away from individual custody, potentially altering the decentralized nature of Bitcoin ownership.

Examining historical data, the analysis reveals a similar lack of growth in self-custody addresses between 2017 and 2018, suggesting that broader market dynamics may influence this trend. LookIntoBitcoin's data further underscores the concentration of Bitcoin ownership, with just 1 million addresses holding 1 BTC or more, emphasizing the unequal distribution of the digital asset.

As the landscape of Bitcoin investment continues to evolve with the proliferation of exchange-traded products, ongoing scrutiny is essential to understand its implications for market dynamics, decentralization, and individual ownership patterns.