Spot Bitcoin ETF Flows Jump, Hit 2nd Highest Daily Mark

Net flows to spot bitcoin exchange traded funds reached $880 million on Tuesday, the second highest daily level in their five-month history, as momentum accelerates for the 11 fledgling products.

The Fidelity Wise Origin Bitcoin Fund (FBTC) led Tuesday's surge with nearly $379 million in inflows, followed by BlackRock's iShares Bitcoin Trust (IBIT)'s $274.4 million the ARK 21Shares Bitcoin ETF (ARKB)'s $139 million in inflows, according to data from U.K.-based asset manager Farside Investors. 

"Fidelity not messing around," Bloomberg Senior ETF Analyst Eric Balchunas tweeted. "Second best day ever."

The products have generated about $3.3 billion in inflows the past month, resuming their torrid pace after an early spring slowdown. They've reached nearly $15 billion in total flows amid a rapidly growing appetite for cryptocurrency-focused investments, and despite recent angst over so-called risk-on assets. 

The funds' total assets under management are approaching $55 billion. Ten of the funds debuted Jan. 11, a day after the Securities and Exchange Commission approved them to start trading.

Bitcoin rose past $71,000 Wednesday, its highest level since early April. The largest digital asset by market capitalization was up 1.5% over the past 24 hours and has added more than 6% during the past seven days. Meanwhile, SEC approval of a rules change that would list spot Ethereum ETFs has increased the likelihood that those products will begin trading in the near future, pushing the price of ether, the second largest crypto in market value, to levels not seen since early 2022.

GBTC Generates Inflows

On Tuesday, even the Grayscale Bitcoin Trust (GBTC) finished in positive territory, one of the few times it has done so since converting from a trust with $28 million in inflows. IBIT and GBTC control the most assets among the spot bitcoin ETFs. 

In a note to etf.com, Mark Connors, managing director, head of global macro strategy at Onramp, a Dallas-based, bitcoin-focused financial services firm, attributed the recent increase to growing judicial and now legislative support for bitcoin. "Industry adoption is entering 'terra incognito.'" 

In a Telegram exchange with etf.com, Noelle Acheson, the author of the Crypto is Macro Now newsletter, called "the macro set-up for BTC (bitcoin)...strong," with yields falling and expectations for rate cuts increasing. "Both are strong liquidity indicators—BTC continues to be one of the more sensitive assets to macro liquidity."

She added that "we're probably seeing the result of some of the large investment platforms finally having their systems ready to onboard clients."