Bitcoin ETFs See Inflows as Grayscale Outflows Slow Down
U.S. Bitcoin ETFs experienced a surge in inflows as the price of Bitcoin rose above $43,000. On Monday, all ten publicly traded spot ETFs launched on January 11 collectively received $255 million in net flows. This includes the Grayscale Bitcoin Trust (GBTC), which has been seeing daily outflows since becoming an ETF. However, the outflow figure for Grayscale decreased significantly to $191.7 million on Monday, compared to a loss of $640 million the previous week.
The Fidelity Wise Origin Bitcoin Trust (FBTC) attracted the most inflows with $208.2 million, followed by BlackRock’s iShares Bitcoin Trust (IBTC) with $198.4 million. Bitwise and Ark’s ETFs also saw inflows of $20 million and $17.2 million, respectively.
In total, U.S. Bitcoin ETFs have received $1.01 billion in net flows so far. This makes Bitcoin the second largest commodity ETF after gold.
Grayscale Outflows Slow Down
Grayscale, which previously lost over $5 billion worth of Bitcoin, has seen a slowdown in outflows. Analysts believe that early clients are now cashing out after the value of its shares was restored to parity with its underlying BTC holdings. Additionally, bankrupt crypto exchange FTX sold $900 million worth of GBTC shares after it transitioned into an ETF.
The declining volume of Grayscale’s fund suggests that the sell-off is subsiding, with IBIT’s volume rivaling that of GBTC for two consecutive trading days this week. On Tuesday, Bitcoin spot ETFs had a trading volume of $806 million, including contributions from Grayscale and BlackRock’s funds.
Investors are also rotating their assets from Grayscale to BlackRock due to the latter’s lower management fee of 0.1% compared to Grayscale’s 1.5%. Bitwise CEO Matt Hougan highlighted the advantages of Bitcoin ETFs’ low fees, stating that “$100 million of bitcoin fits on a device the size of a thumb drive.”
Hot Take: Bitcoin ETFs See Inflows While Grayscale Outflows Slow
Bitcoin ETFs in the U.S. are gaining popularity as investors pour money into these funds. The recent surge in Bitcoin’s price has contributed to the influx of funds, with net flows reaching $255 million in a single day. Meanwhile, Grayscale, the largest Bitcoin Trust, is experiencing a slowdown in outflows as its shares regain parity with BTC holdings. This indicates that some early clients are now cashing out.
The competition among ETF providers is heating up, with Fidelity and BlackRock attracting significant inflows. The declining volume of Grayscale’s fund suggests that the sell-off is subsiding, while BlackRock’s lower management fee makes it an attractive option for investors.
All in all, Bitcoin ETFs are becoming a popular choice for investors looking to gain exposure to cryptocurrencies without directly holding them. As the market evolves, we can expect more inflows into these funds and increased competition among providers.
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