New Highs for Bitcoin ETFs as Net Inflows Top $2.2 Billion Amid Rising Prices
Summary:
Bitcoin exchange-traded funds (ETFs) saw significant growth in the recent week with net inflows exceeding $2.2 billion, outdoing all other ETFs in the U.S. BlackRock's IBIT fund secured the largest share, with $1.6 billion in positive flows. Despite outflows from Grayscale’s GBTC, new ETFs are believed to drive Bitcoin's price increase, with it appreciating 91% over the last four months. Major banks and financial institutions are also showing interest in these ETFs.
The recent week saw a significant surge in Bitcoin exchange-traded funds (ETFs), with net inflows exceeding $2.2 billion from Feb. 12 through Feb. 16. In a report by Bloomberg's Eric Balchunas, the total amount outpaced that of any of the 3,400 ETFs in the U.S. BlackRock's IBIT fund collected the largest share of capital, racking up positive streams of $1.6 billion in the week, as depicted by BitMEX Research data. Balchunas pointed out that "$IBIT alone has absorbed $5.2b YTD, half of BlackRock's total net ETF inflows across its 417 ETFs."
Among the Bitcoin (BTC) funds holding several billion dollars, Fidelity’s FBTC received substantial inflows, drawing in $648.5 million over the last five days of trading. In the meantime, Ark 21Shares’ ARKB and Bitwise’s BITB attracted $405 million and $232.1 million respectively. On the other hand, outflows from Grayscale’s GBTC have affected the collective performance of the ETFs. The fund faced $624 million in withdrawals in the recent period, as investors opt for low-fee alternatives, resulting in a capital drain of over $7 billion since Grayscale's conversion to an ETF on Jan. 10.
Bloomberg Intelligence/Eric Balchunas indicates ETFs flow between Feb.12 - Feb.16.
The introduction of new ETFs is thought to catalyze Bitcoin's current price escalation. The digital currency has increased by 91% over the preceding four months, buoyed by market enthusiasm for the ETFs' approval by the U.S. Securities and Exchange Commission (SEC) last month. Bitcoin has risen nearly 7% over the week and is presently priced at $51,434, marking a 24% growth in February.
Major banks and finance firms are taking an interest in these new ETFs. In a letter dated Feb. 14, a coalition of trade groups representing major Wall Street firms urged the SEC to revise the Staff Accounting Bulletin 121 (SAB 121), which details the accounting of crypto asset custody duties. This would permit banks to serve as custodians of the BTC funds. An article stated: 'Crypto is inevitable’ so we went ‘all in’ — Meet Vance Spencer, permabull
Published At
2/18/2024 12:17:30 AM
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