BlackRock’s $24 billion Bitcoin flywheel is moving BTC liquidity with 800% growth

BlackRock’s iShares Bitcoin Trust has taken in $23.8 billion in net inflows this year, while the firm’s tokenized U.S. Treasury fund, BUIDL, has expanded roughly 800 percent over 18 months.

IBIT’s 2025 haul places it among the largest asset gatherers in the ETF market. Daily flow prints remain the fastest way to track whether that bid is building or fading across U.S. trading hours, where Bitcoin market depth has concentrated since spot ETFs launched.

The immediate question is how sustained ETF allocation interacts with Bitcoin’s post-halving issuance. Current supply is near 450 BTC per day, which reflects 3.125 BTC per block at roughly 144 blocks per day. That issuance has fixed the supply side at a narrow trickle relative to large capital pipes.

As $24 billion arrived over roughly 275 days, the run rate is about $87 million daily.

At $90,000 per BTC, that equates to about 970 BTC of implied daily demand, at $120,000, about 725 BTC per day, and at $130,000, about 670 BTC per day.

Even the higher price points leave IBIT’s 2025 average above fresh issuance, and that excludes flows into other spot ETFs that also source coins from the same pool of circulating supply.

Flow is not the only determinant of returns, and day-to-day tape action can deviate from a simple supply-absorption model.

The statistical relationship between daily ETF net flows and Bitcoin returns is modest, with an R² near 0.32. Liquidity has migrated toward U.S. hours as market depth on U.S. venues increased after ETF approval.

This pattern helps explain why the spot tape and spreads often respond fastest around the Wall Street close, when flow data lands and market makers rebalance. It also highlights the risk profile on reversal days.

IBIT has printed sizable outflows at times this year, and those sessions have mapped to wider spreads and thinner books even as the broader trend has pointed to accumulation. That context keeps the focus on variance, not only on averages.

BUIDL extends the other side of the loop by putting short-duration Treasurys on chain for KYC’d holders.

BUIDL crossed $1 billion in assets less than a year after launch. Adding additional share classes on other chains brought lower-latency rails to a tokenized cash account structure that already lived on Ethereum, pushing assets close to $3 billion.

That growth comes in around 800 percent over the first 18 months.

BUIDL holders can transfer shares to USDC using a smart contract-based mechanism that functions as a 24/7 off-ramp outside the primary creation and redemption cycle. This tightens the fiat-to-on-chain dollar link and gives market participants a faster settlement option for collateral management and liquidity buffers.

That link matters on rebalance dates, on margin calls, and when ETF flow surprises need rapid hedging.

The macro backdrop frames the yield leg of tokenized cash.

Front-end rates have eased from their peaks yet remain positive in nominal terms, and the 3-month Treasury yield continues to anchor in a range that leaves tokenized T-bill products appealing as a treasury management tool for firms that operate around the crypto clock.

If the 10-year drifts lower while policy expectations stabilize, carry on tokenized bills remains competitive relative to on-exchange cash balances that do not earn interest, which can support steady subscriptions even without price-sensitive inflow bursts.

The funds’ mechanics still include operational gates and best efforts windows during stress, as documented in public posts by tokenization venues, so intraday liquidity should not be treated as unconstrained.

Spot ETF demand has also shown bursts beyond the average. Global spot ETF holdings added roughly 20,685 BTC in mid-September, the strongest weekly clip since early summer, lifting U.S. spot ETF holdings to around 1.32 million BTC.

That step-up coincided with renewed attention on distribution platforms and model portfolios and the rising use of futures basis and options overlays to manage basis risk against ETF creations and redemptions.

The rise in U.S. trading hour depth adds a microstructure channel through which these allocations meet the order book, centralizing liquidity when U.S. advisors, RIAs, and funds rebalance.

In the bigger picture, tokenization forecasts help bound the upside for on-chain dollar rails. Per Citi’s GPS series, tokenized assets could reach about $4 to $5 trillion by 2030, with stablecoins as an asset class reaching up to about $4 trillion in market value by that date.

A separate study by BCG and ADDX outlines a higher ceiling in the mid-teens trillions. These ranges are not base cases for the next year; they are a lens for thinking about what fraction of institutional cash and collateral might migrate to tokenized instruments that interoperate with crypto exchange infrastructure.

If BUIDL and peer vehicles climb in the low billions over the next four quarters, even a few billion dollars of additional on-chain cash that can move between venues in minutes rather than days will change how market makers warehouse risk around ETF prints.

A simple set of 2025 scenarios helps frame the next leg.

A mid-year projection placed 2025 total spot Bitcoin ETF net inflows near $55 billion. This has been smashed with $59 billion already coming in by October, and at an average transaction price of $120,000, cumulative demand equates to roughly 458,000 BTC over a year, or about 1,250 BTC per day if linearized, still well above new issuance.

A softer year that finishes between $25 and $35 billion due to outflows would still leave the structural bid near or above issuance at many price points. In contrast, a stronger distribution push that lifts totals into the $70 to $85 billion range would significantly exceed issuance unless long-term holders distribute.

None of these outcomes requires extrapolating parabolic moves; they simply convert reported and projected dollar flows into coin equivalents and compare them to the known issuance path.

The loop between IBIT and BUIDL is mechanical, not narrative.

ETF allocations bring regulated capital into Bitcoin with standard brokerage pipes, raising the pool of coin held off exchange and shifting inventory.

With USDC off-ramps and multi-chain support, tokenized cash accounts allow institutions to move dollars within crypto’s settlement cycle without leaving treasury-grade instruments.

As these rails scale, spreads and market depth have more support during U.S. hours, rebalancing around the daily flow tape becomes smoother. According to Kaiko, that concentration effect is already visible in order book data, and it aligns with what SoSoValue and Farside show on the flow side.

There are caveats. Flow cycles oscillate, and Kaiko’s correlation work implies that a large inflow does not guarantee a proportional return on the same day.

Outflow episodes have also arrived, which means coverage ratios in the table above compress quickly when the sign flips. Operational windows on tokenized funds can tighten during stress, which reduces instant convertibility until capacity resets.

Those frictions do not negate the structural changes; they define operating parameters for treasury desks and trading teams adapting to a market where regulated ETFs and tokenized short-duration instruments now move liquidity with fewer intermediaries.

The flywheel framing does not require a dramatic claim about inevitability.

It is enough to note that a large regulated buyer has already accumulated almost $60 billion in Bitcoin this year.

At the same time, a tokenized cash account from the same asset manager has reached the low billions in assets with a programmatic USDC bridge.

The next data point arrives with Monday’s weekly ETF flow update.

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