Inflows into the nine recently launched exchange-traded funds (ETFs) tied to bitcoin have surged once again this week following a rebound in the cryptocurrency’s price from last week’s dip.
Renewed Interest Sparked by Bitcoin’s Strong Performance
Todd Rosenbluth, head of research at VettaFi, an analysis firm, commented, “The resumption in bitcoin’s strong performance is sparking renewed interest in the ETFs.”
Impressive Asset Accumulation
Data from BitMEX Research reveals that the nine funds, which debuted in January, attracted over $1.2 billion in assets within the first three days of this week.
Shift in Leadership Among ETFs
During the initial two days of the week, there was a notable shift in leadership from BlackRock’s iShares Bitcoin Trust to the Fidelity Wise Origin Bitcoin Fund. The latter saw more than double the inflows compared to BlackRock’s fund. However, BlackRock’s iShares ETF reclaimed the lead on Wednesday, registering the strongest inflows since mid-March.
Exception: Grayscale Bitcoin Trust
The Grayscale Bitcoin Trust, which transitioned into an ETF on the same day as the other nine ETFs, continues to defy this trend. Despite bitcoin’s price movements, it has experienced steady outflows. In the first three days of this week alone, outflows from the Grayscale Bitcoin Trust amounted to $862.2 million.
Market Dynamics
David Mercer, CEO of LMAX Group, an institutional cryptocurrency exchange, acknowledged that the ETF market’s numbers are influenced significantly by Grayscale. However, he emphasized that these flows are relatively small when compared to bitcoin’s total market capitalization.
ETF Flows Impacting Bitcoin’s Price
While the ETF flows may seem insignificant compared to bitcoin’s market size, they appear to be influencing bitcoin’s price trajectory. Mercer highlighted that bitcoin’s price struggled to rally when there were outflows from the ETFs, indicating a correlation between ETF flows and bitcoin’s performance.
