Fund Inflows to Bitcoin ETFs Drop After Strong Debut
Fund inflows to exchange traded funds (ETFs) tied to the spot price of bitcoin dropped to about $200 million on the second day of trading after attracting $629 million on their debut on Jan. 11, early estimates from J.P. Morgan showed.
BlackRock and Fidelity Lead in Attracting Funds
So far, ETFs by BlackRock and Fidelity have attracted the most funds at nearly $500 million and $423 million, respectively, in the first two days of trading, the brokerage estimated. However, details on fund flows from issuers such as Bitwise, Franklin and VanEck are still awaited.
Bitcoin’s Surge and Trading Activity on Debut Day
Bitcoin has surged nearly 60% since September end on bets that an approval would usher in new capital as exposure to the world’s biggest digital asset on a regulated exchange removes the hassle of directly owning it. On the debut day, $4.6 billion worth of shares changed hands across all the products with Grayscale, BlackRock and Fidelity dominating trading activity.
Outflows from Grayscale Bitcoin Trust
The $26.53 billion Grayscale Bitcoin Trust saw outflows of $478 million over the first two days, J.P.Morgan said. Profit-taking from early investors on the fund was widely expected as it was earlier a close-end fund trading at a discount to its underlying bitcoin assets. J.P.Morgan had in November estimated that the fund could record nearly $3 billion in outflows after the ETF conversion.
Hot Take: Bitcoin ETFs Experience Initial Surge But Face Challenges Ahead
The launch of bitcoin ETFs has generated significant excitement and initial inflows. However, the drop in fund inflows after the strong debut suggests that challenges lie ahead for these products. While BlackRock and Fidelity have attracted substantial funds, other issuers are still awaiting details on their fund flows. Additionally, the outflows from the Grayscale Bitcoin Trust highlight the profit-taking behavior of early investors. Despite the surge in bitcoin’s price and trading activity on debut day, it remains to be seen how these ETFs will perform in the long term.
By
By
By
By
By