Bitcoin ETFs Gain $520 Million in Inflows as Grayscale Outflows Hit a Low
Bitcoin spot ETFs saw a surge in activity on Monday, with Bitcoin’s price reaching $57,000 for the first time since November 2021. Data from BitMEX Research shows that Bitcoin ETFs experienced $520 million in daily net inflows, making it one of their best-performing days since their launch in January. In total, these ETFs have accumulated $6 billion worth of BTC since their inception.
Bitcoin ETFs Rebound After Rally
This includes the flows surrounding the Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin fund that converted into an ETF in January. Despite facing continuous outflows due to its high fee structure, yesterday’s daily outflow from GBTC reached a record low of just $22.4 million.
This positive trend comes less than a week after the European Central Bank dismissed Bitcoin as having no real value and referred to its rally following ETF approvals as a “dead cat bounce.” In contrast, competing funds from BlackRock, Fidelity, and others have seen inflows of $13.4 billion over the past 47 days. Currently, ETFs hold over 723,000 BTC, valued at $41.2 billion at today’s price.
BlackRock Sets Record Bitcoin Trading Volume
Monday saw impressive flows as nine newly launched Bitcoin ETFs (excluding Grayscale) recorded a total daily volume of $2.4 billion, including $1.3 billion for BlackRock’s ETF alone. This figure placed IBIT among the top 11 ETFs by volume in the country.
It is important to note that “flows” refer to the amount of Bitcoin gained or lost by the fund, while “volume” refers to the amount traded. Bloomberg ETF analyst Eric Balchunas noted that these ETFs tend to experience heightened activity on the first day after the weekend, although the exact reason for this is unclear.
Correlation Between Bitcoin ETF Inflows and Price Action
Inflows to Bitcoin ETFs have shown a correlation with the price movement of Bitcoin. In January, when Bitcoin’s price dropped from $49,000 to $39,000, Grayscale investors sold $500 million worth of BTC per day for several consecutive days. Conversely, when GBTC sales slowed down earlier this month, Bitcoin’s price rose above $50,000 and Bitcoin ETFs started accumulating approximately $500 million per day in net inflows.
Potential Impact on Coinbase
Some analysts speculate that Bitcoin ETFs may eventually pose a threat to Coinbase’s dominance as the nation’s most popular Bitcoin trading venue. As these ETFs continue to gain traction and attract significant inflows, they could potentially overshadow Coinbase’s position in the market.
Hot Take: Bitcoin ETFs Gain Momentum While Grayscale Sees Outflows Plummet
Bitcoin spot ETFs have made a strong comeback with a surge in daily net inflows of $520 million. This resurgence comes as Grayscale experiences record low outflows from its Bitcoin fund. The positive performance of these ETFs demonstrates growing investor interest and confidence in Bitcoin.
Furthermore, BlackRock’s ETF alone recorded a daily volume of $1.3 billion, highlighting the strong demand for Bitcoin investment products. This trend suggests that investors are increasingly turning to regulated investment vehicles like ETFs to gain exposure to the cryptocurrency market.
The correlation between Bitcoin ETF inflows and price action further supports the notion that these investment vehicles play a significant role in driving the market. As more investors allocate their funds into Bitcoin ETFs, it is likely that we will continue to see an impact on Bitcoin’s price movement.
Overall, the recent developments in the Bitcoin ETF space indicate a growing acceptance and adoption of cryptocurrencies within traditional financial markets. With increasing institutional interest and regulatory approvals, it is clear that cryptocurrencies are becoming a mainstream asset class.
Disclaimer: The above references an opinion and is for informational purposes only. It is not intended as investment advice. Please do your research thoroughly before making any investment decisions.
By
By
By