Spot Bitcoin ETF Inflows Surge, Pass $1 Bln for Week

The strong flows this week underscore the growing demand for these products.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Following a brief lull last week, bitcoin ETF inflows renewed their rapid march upward, pushing the price of the asset to its highest levels since late 2021. 

On Tuesday, funds reached $576.8 million in net inflows, their third highest total since they started trading Jan. 11, and have already surpassed $1 billion for the week, according to the research arm of crypto exchange BitMex. BlackRock’s iShares Bitcoin Trust (IBIT) generated its own single-day record with about $520 million in flows and has totaled more than $6.5 billion in flows overall.

Spot bitcoin ETFs based on the most current market value of the largest cryptocurrency by market capitalization have generated over $6.7 billion in inflows in less than two months, despite more than $7.5 billion in outflows from the Grayscale Bitcoin Trust (GBTC)

That product differs from other offerings. GBTC is a conversion from a longer-standing bitcoin trust and charges a 1.5% fee, by far the highest among the 10 new offerings.

“Investors seem to have fully embraced spot bitcoin ETFs as an easy use channel for making bets on the cryptocurrency,” etf.com analyst Sumit Roy said. “Further price gains may encourage more investors to take the leap into these ETFs, fueling even higher prices and more inflows. Of course, this cycle can eventually play out in reverse as well.”

Bitcoin Price Soars

The products’ success underscores the pent-up demand for spot BTC ETFs after a decade of issuers seeking SEC approval for their applications. The new ETFs availability has now helped spur some of the most dramatic price gains in bitcoin’s 15-year history. 

Some analysts are now predicting that bitcoin will top its previous record high near $70,000, set in November 2021, in the weeks ahead or even sooner. On Wednesday, bitcoin topped $63,500 before retreating, according to CoinGecko data. 

In a note to etf.com, Mark Connor, head researcher for Canadian crypto asset manager 3iQ wrote that he expected volumes and price to continue increasing.

“It won’t be in a straight line, but the record flows into ETFs are accelerating without most RIAs or any of the wire house’s green lighted yet,” he noted, adding: “The price action may alarm some, but this is following the pattern BTC has followed since inception…and we are at the sweet spot for price appreciation as our 2024.”

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.