Bitcoin ETFs Witness $562 Million Influx Amid Soaring Prices and Rising Institutional Demand
Summary:
Bitcoin exchange-traded funds (ETFs) experienced a $562 million net inflow on March 4, amid Bitcoin's price crossing $68,000. The continued institutional demand for Bitcoin is evident with BlackRock’s IBIT and Fidelity’s FBTC recording the highest inflows on the day. Despite significant outflows, Bitcoin ETFs, within two months of trading, have seen a net inflow of $7.5 billion. The increased demand is expected to continue, particularly with Bitcoin's upcoming halving, which could lead to a supply-demand imbalance and act as a price catalyst.
On March 4, Bitcoin exchange-traded funds (ETF) experienced an inflow surge of $562 million, further boosting the ETFs by half a billion on the day when Bitcoin's price crossed the $68,000 mark, with the record high just less than 1% distant. This was counted as the third biggest inflow for Bitcoin since trading began on January 11. Even though outflows from minor parties and Grayscale Bitcoin Trust (GBTC) resulted in the Monday ETF not being the highest, a half a billion net inflow still signals a strong continuous demand from institutions when considering the $368 million outflows from GBTC. With a massive inflow of $420 million, BlackRock’s IBIT led the day followed by Fidelity’s FBTC with $404 million. The net vault into the Bitcoin ETF spot is tenfold the number of daily new miners.
On Monday, the highest Bitcoin ETF trading volume hit $5.5 billion, marking the second-largest volume trading day since it started. Institutional demand and elevated trading volume are noticeable from the fact that ETFs, ETPs and Bitcoin institutions are now managing 1 million BTC, that is roughly about 5.13% of the total circulating BTC.
As of the second week of January, when Bitcoin ETFs started their trading journey, within two months they experienced a staggering net inflow of $7.5 billion worth of BTC regardless of overflows of assets worth $9 billion. Already, BlackRock's IBIT ETFs have touched the $10 billion mark; in comparison, gold ETFs took approximately two years to reach this amount.
The needs for Bitcoin ETFs could be in even more demand in the future days as BlackRock has submitted an application to acquire BTC for its Strategic Income Opportunities Fund. The BTC daily provision will be halved in the month ahead as per the Bitcoin halving schedule, despite market demand being ten times higher currently, indicating there might be massive supply-demand discrepancy that could act as a propelling force for Bitcoin prices during the bullish wave.
During the latest $500 million-plus net inflow into Bitcoin ETF's spot, the Bitcoin price breached the $68,000 limit and it is a little less than $1,000 from reaching the record high of the previous price cycle.
Published At
3/5/2024 1:42:35 PM
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