February 12, 2024

Bitcoin ETFs Surge Past $10 Billion Inflow Within a Month of Approval

The nine spot bitcoin ETFs reached a significant milestone of $10 billion in assets under management on Feb. 9.

In a remarkable display of investor interest, spot bitcoin exchange-traded funds (ETFs), GBTC excluded, have swiftly amassed over $10 billion in assets under management (AUM) within their first 20 trading sessions.

Data reveals that net inflows for these nine ETFs surged to $2.7 billion on Jan. 9 alone. Leading the charge is the BlackRock iShares Bitcoin Trust, boasting an impressive $4 billion worth of bitcoin holdings. Following closely is the Fidelity Wise Origin Bitcoin Fund, managing over $3.4 billion in BTC.

Notably, the ARK 21Shares Bitcoin ETF has also crossed the billion-dollar threshold, securing approximately $1 billion in its portfolio. Meanwhile, Grayscale Bitcoin Trust (GBTC) experienced substantial outflows, totaling $6.3 billion over the past 30 days. On Feb. 9, the fund saw its lowest daily volume of capital withdrawals since its conversion, standing at $51.8 million.

Observing these developments, Bloomberg analyst Eric Balchunas remarked on the resilience of the ETFs:

"I thought the Nine would get a bit weaker as GBTC outflows subsided but they’re getting stronger."

Anticipating further growth, experts expect bitcoin ETF flows to surge as trading firms conclude their due diligence on these investment vehicles.

In terms of price action, bitcoin maintained its position above critical technical support levels in January. Over the month, the cryptocurrency recorded a modest increase, reaching $42,562.

Offering a bullish outlook, ARK Invest suggests that bitcoin is increasingly replacing gold as a risk-off asset. The analysis notes a significant uptrend in bitcoin's price relative to gold, with bitcoin's purchasing power rising to around 20 troy ounces compared to 1 troy ounce in April 2017. ARK Invest believes this trend will persist as bitcoin solidifies its role in financial markets.

Given the prevailing macroeconomic conditions, ARK Invest predicts that bitcoin will remain resilient, particularly as inflation moderates and real interest rates climb, causing banks to continue losing deposits.

The approval of bitcoin ETF applications by the United States Securities and Exchange Commission (SEC) marks a significant milestone, occurring more than a decade after the initial application by Cameron and Tyler Winklevoss to launch the Winklevoss Bitcoin Trust in 2013.

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