Bloomberg Analyst Deems Zero-Inflow Days Normal For Bitcoin ETFs Amid Concerns
Summary:
Addressing concerns about days of zero inflows into Bitcoin (BTC) exchange-traded funds (ETFs), Bloomberg's ETF analyst James Seyffart clarifies this is a normal occurrence and not indicative of the products failing. He elucidates Ethereum's ETF inflow recording processes and defines ‘creation units’. Over the past days, significant outflows have been registered from Bitcoin ETFs coinciding with Bitcoin's price dip and ongoing geopolitical instability.
James Seyffart, a Bloomberg ETF analyst, has addressed concerns regarding Bitcoin (BTC) exchange-traded funds (ETFs) observing days without any inflow. He clarified that this is a common occurrence and not indicative of these products failing. Seyffart noted that on most days, a significant majority of American ETFs do not see any inflow, which is a standard characteristic of the sector. He estimated that out of about 3,500 American ETFs, 2,903 recorded no inflow on a random day.
There has been speculation about the lacklustre inflow into Bitcoin ETFs based in the US. Notably, within one week, BlackRock's Bitcoin ETF reported inflow over two consecutive trading days – the only one to do during that period.
Brushing off concerns, Seyffart explained it was common due to inflow recording processes. A substantial mismatch between supply and demand would need to exist before a fund could record new inflows or outflows through the creation or destruction of fund shares, referred to as 'creation units'.
Elaborating on 'creation units', Seyffart described them as lots, with sizes varying amongst ETFs. In the case of spot Bitcoin ETFs, the units fall in the range of 5,000 to 50,000 shares.
The last six trading days saw four days of net outflow across all ten US spot Bitcoin products. The Grayscale Bitcoin Trust (GBTC) registered the highest volume of selling. Preliminary data from Farside Investors indicates $79.4 million outflows from GBTC, while ARK 21Shares Bitcoin ETF (ARKB) also marked significant outflows amounting to $12.9 million.
Over the last couple of days, all combined ETFs have registered net outflows of $55.1 million and $36.7 million. The recent decrease in Bitcoin ETF inflows coincided with Bitcoin's price dip of 7.8% in a week, as per TradingView data. Traders attribute the present market volatility to geopolitical unrest in the Middle East and anticipation ahead of the Bitcoin halving event scheduled for April 20.
Published At
4/17/2024 4:19:47 AM
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