New Bitcoin ETFs Attract Record Daily Flows
Bitcoin spot ETFs, recently launched, experienced their highest daily flows on the fourth day of trading, with a total of $913.6 million invested on Wednesday. This influx of capital brings the combined assets under management for all newly traded Bitcoin ETFs to $2.9 billion. It’s worth noting that these figures exclude flows related to the Grayscale Bitcoin Trust (GBTC), which is currently the largest and most actively traded Bitcoin ETF.
Outflows from Grayscale and Rival Bitcoin ETF
Since converting into an ETF on January 11, the Grayscale Bitcoin Trust has seen consistent outflows as investors sell off their long-held BTC or switch to newer and more affordable Bitcoin ETFs offered by BlackRock, Fidelity, and other providers. On Wednesday alone, Grayscale experienced outflows of $450.6 million, bringing its net outflows since conversion to $1.6 billion. Overall, net flows to all ETFs amounted to $1.2 billion.
Impact on Rival Bitcoin Funds
The launch of these new Bitcoin spot ETFs has had an impact on other Bitcoin funds and investment products. The ProShares Bitcoin Strategy ETF (BITO), a futures-based Bitcoin ETF launched in October 2021, has seen its assets under management decrease from $2.28 billion before the spot ETF approvals to $1.86 billion as of Tuesday. Additionally, MicroStrategy, the largest corporate holder of BTC, has seen its stock price drop by 25% since last Thursday, while Bitcoin mining firms like CleanSpark have suffered corrections of over 30%. Even Bitcoin itself has fallen by approximately 11% since last week.
Conclusion: Early Success for Bitcoin Spot ETFs
The newly launched Bitcoin spot ETFs have attracted significant investor interest, resulting in record daily flows. While Grayscale has experienced outflows since converting to an ETF, the overall growth of Bitcoin ETFs is evident. These developments have also impacted rival Bitcoin funds and related companies. It remains to be seen how the market will continue to evolve and whether these trends will persist in the long term.
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