BlackRock’s Bitcoin ETF Records Zero Inflows: A Turning Point?
BlackRock’s Bitcoin ETF, under the ticker name IBIT, has experienced a significant shift in trading dynamics. After a streak of 71 consecutive days of inflows, IBIT recorded zero inflows during Wednesday’s trading session, marking the first time in nearly three months.
Significance of IBIT’s Inflow Streak
IBIT emerged as a frontrunner in the race among Bitcoin ETFs, securing the top spot in inflows and trading volume. However, this recent halt in inflows signals a potential turning point for the fund, falling just short of claiming the record for consecutive inflow days.
- Eric Balchunas, an ETF expert at Bloomberg, highlighted the importance of IBIT’s 71-day streak of inflows, noting its formidable performance since launch.
- Even the popular gold ETF, GLD, only experienced a three-day streak of inflows during its initial phase compared to IBIT’s streak.
Market Trends among Bitcoin ETFs
On Wednesday, BlackRock was not the only Bitcoin ETF issuer to report zero inflows; eight others also experienced the same. Notable exceptions were Fidelity and Ark Invest, with the former leading in terms of inflows.
- Fidelity recorded $5.6 million in inflows during the session, positioning it as a strong contender in the ETF race.
- Ark Invest followed closely with $4.2 million in inflows, showcasing solid performance in the market.
Grayscale Experiences Outflows
Contrary to Fidelity and Ark Invest, Grayscale, a significant BTC holder, saw outflows totaling $130 million on Wednesday alone. This trend has applied downward pressure on Bitcoin’s price, which has dropped by 4.2% in the past 24 hours, currently at $62,990.
- Farside data indicates that Grayscale’s ETF GBTC has witnessed outflows amounting to $1.2 billion in April alone, affecting Bitcoin’s price stability.
Declining Demand for Bitcoin and Negative Funding Rate
Bullish traders in the Bitcoin market have begun reducing their positions as demand for the cryptocurrency wanes. Two notable factors that have fueled its growth are showing signs of diminishing.
- The Bitcoin funding rate turned negative on April 19 for the first time since October 2023, pointing to reduced interest in opening long positions.
- This shift in funding rate suggests a moderation in demand following the launch of US spot Bitcoin ETFs and Bitcoin’s record highs of $73,700 on March 15.
Market Analysis and Insights
Analysts and experts have provided insights into the market trends, highlighting the potential consequences of reduced demand for Bitcoin and declining funding rates.
- Julio Moreno, the Head of Research at CryptoQuant, mentioned how this trend affects traders’ willingness to enter new long positions.
- Analyst Vetle Lunde from K33 Research noted the unusual streak of neutral-to-below-neutral funding rates and its implications for market consolidation.
New Bitcoin ETFs in Hong Kong Market
As the cryptocurrency market looks for new catalysts, attention is shifting to Hong Kong, where a new set of spot Bitcoin ETFs is set to debut. Observers are eager to see if these ETFs can replicate the demand seen by their US counterparts.
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