The introduction of Spot Bitcoin Exchange-Traded Funds (ETFs) have caused quite a stir in the financial markets.
A recent report from CoinShares, an alternative asset manager specializing in digital assets, indicate that Bitcoin spot ETFs offered by leading asset management firms like BlackRock, Fidelity, Bitwise, Grayscale, ProShares and 21Shares have all witnessed inflows north of $700 million in last week alone. Analysts are surprised by the exceptional performance these investment vehicles are showing in such a short time.
According to the report, CoinShares Head of Research James Butterfill stated that the newly approved spot Bitcoin ETFs have raked in $1.9 billion inflows over the last 4 weeks, bringing total inflows since launch to $7.7 billion. On the other hand, short-Bitcoin products saw minor outflows totalling $5.3 million.
Significant Inflows
According to CoinShares, the flow of funds into bitcoin recorded last week were second-largest since the approval of spot bitcoin ETF by the United States Securities and Exchange Commission (SEC) on January 10 and the second-largest since the bull market peak of late 2021.
Additionally, Butterfill also pointed out that the year-to-date net inflows amount to $1.6 billion and total assets under management is close to $53 billion. He noted:
“Regionally, the focus remains on the US, which saw US$721m inflows last week, with newly issued ETFs seeing US$1.7bn inflows. These new ETFs have now averaged US$1.9bn inflows over the last 4 weeks, bringing total inflows since launch (11th January) to US$7.7bn.”
Bitcoin Spot ETFs Inflows and Decline in GBTC Outflows
While still elevated, the persistent decline in outflows from Grayscale’s higher-fee converted spot bitcoin ETF (GBTC) has contributed to improved fund flows. GBTC experienced a notable decrease in outflows, amounting to $927 million last week compared to the previous week’s $2.2 billion. This reduction signifies a noteworthy slowdown in outflow dynamics in recent weeks, as observed by Butterfill.
Despite this positive development, trading volumes for the funds dipped to $8.2 billion from the previous week’s $10.6 billion. Nevertheless, the current volume remains significantly higher than the 2023 weekly average of $1.5 billion. Butterfill noted that this latest figure constitutes 29% of bitcoin’s overall trading volume on reputable exchanges during the past week.
BlackRock, Fidelity Ranked Top 10 in January Inflows
The president of investment advisory firm The ETF Store, Nate Geraci, pointed out in a post on social media platform X that the BlackRock iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin ETF (FBTC) were ranked among the top 10 of all ETFs with the highest inflows in January.
IBIT was placed at number eight and had an estimated $2.6 billion in net inflows while FBTC landed in tenth place with $2.2 billion in net inflows.
“Never thought I’d see the day,” Geraci stated.
Geraci also noted that leading asset management firms BlackRock and Fidelity are currently locked in a “two-horse race,” while adding that the other nine ETFs approved by the SEC have yet to match their levels.
He also highlighted that the spot Bitcoin ETF offerings from ARK Invest and 21 Shares, along with Bitwise formed a “strong middle class,” predicting that the two ETFs will soon reach $1 billion in assets under management in the near future.
