Spot Bitcoin ETF Inflows Surge, Pass $1 Bln for Week

Following a brief lull last week, bitcoin ETF inflows renewed their rapid march upward, pushing the price of the asset to its highest levels since late 2021. 

On Tuesday, funds reached $576.8 million in net inflows, their third highest total since they started trading Jan. 11, and have already surpassed $1 billion for the week, according to the research arm of crypto exchange BitMex. BlackRock’s iShares Bitcoin Trust (IBIT) generated its own single-day record with about $520 million in flows and has totaled more than $6.5 billion in flows overall.

Spot bitcoin ETFs based on the most current market value of the largest cryptocurrency by market capitalization have generated over $6.7 billion in inflows in less than two months, despite more than $7.5 billion in outflows from the Grayscale Bitcoin Trust (GBTC). 

That product differs from other offerings. GBTC is a conversion from a longer-standing bitcoin trust and charges a 1.5% fee, by far the highest among the 10 new offerings.

“Investors seem to have fully embraced spot bitcoin ETFs as an easy use channel for making bets on the cryptocurrency,” etf.com analyst Sumit Roy said. “Further price gains may encourage more investors to take the leap into these ETFs, fueling even higher prices and more inflows. Of course, this cycle can eventually play out in reverse as well.”

Bitcoin Price Soars

The products’ success underscores the pent-up demand for spot BTC ETFs after a decade of issuers seeking SEC approval for their applications. The new ETFs availability has now helped spur some of the most dramatic price gains in bitcoin’s 15-year history. 

Some analysts are now predicting that bitcoin will top its previous record high near $70,000, set in November 2021, in the weeks ahead or even sooner. On Wednesday, bitcoin topped $63,500 before retreating, according to CoinGecko data. 

In a note to etf.com, Mark Connor, head researcher for Canadian crypto asset manager 3iQ wrote that he expected volumes and price to continue increasing.

“It won’t be in a straight line, but the record flows into ETFs are accelerating without most RIAs or any of the wire house’s green lighted yet,” he noted, adding: “The price action may alarm some, but this is following the pattern BTC has followed since inception…and we are at the sweet spot for price appreciation as our 2024.”