- U.S. spot Bitcoin ETFs have defied market trends.
- IBIT has taken the lead, attracting billions in inflows.
- Major hedge funds have embraced Bitcoin ETFs.
Amid market fluctuations, a clear trend is emerging in the world of Bitcoin exchange-traded funds (ETFs) that is capturing the attention of investors. Few could have predicted the steady inflows that have now become the hallmark of U.S. spot Bitcoin ETFs.
These funds stand out against broader market turbulence, signaling renewed confidence in Bitcoin-backed assets. Over the past ten trading days, eight of them have seen positive inflows into U.S. spot Bitcoin ETFs, underscoring the growing appetite for these digital asset-based securities.
BlackRock’s Bitcoin Trust Continues to Perform
BlackRock’s iShares Bitcoin Trust (IBIT) is at the forefront of this wave, which alone attracted $55.4 million on August 20, according to SoSoValue. Since its January debut, IBIT has amassed a staggering $20.5 billion in total net inflows, establishing itself as a market leader and overtaking Grayscale in assets under management (AUM).
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Remarkably, IBIT has encountered just one day of net outflows since its inception, a minor blip on May 1. Following closely behind is the Ark 21Shares Bitcoin ETF (ARKB), which reported an impressive $51.9 million in inflows on the same day, cementing its position as a strong competitor to IBIT.
However, not all funds are sharing in the success. The Grayscale Bitcoin Trust (GBTC) reported a net outflow of $12.8 million on August 20, continuing the challenges it has faced since converting to an ETF. Meanwhile, the Bitwise Bitcoin ETF (BITB) saw a modest outflow of $6.5 million; other funds remained largely stagnant.
Grayscale’s difficulties are evident. Its flagship fund has shed $19.6 billion in value over the past seven months, highlighting its struggles in the current market climate. In contrast, its recently launched lower-fee Bitcoin Mini Trust (BTC), which debuted on July 31, has garnered a modest $288 million in inflows, offering a glimmer of hope for the firm.
Spot Ether ETFs Face Headwinds
The landscape of institutional investment is also shifting, with 60% of the largest U.S. hedge funds now reportedly holding positions in Bitcoin ETFs, according to Sam Baker, a researcher at River, an investment firm.
Yet, while Bitcoin ETFs are basking in their inflow success, spot Ether ETFs are experiencing a rough patch. These funds have recorded outflows on five of the past eight trading days.
On August 20, the nine newly launched spot Ether ETFs posted a net outflow of $6.5 million, marking their fourth straight day of declines. Although BlackRock’s iShares Ethereum Trust (ETHA) achieved $26.8 million in net inflows, it was overshadowed by the $37 million outflows from Grayscale’s Ethereum Trust (ETHE).
On the Flipside
- While the growing number of hedge funds investing in Bitcoin ETFs indicates increasing institutional acceptance, this trend is relatively recent.
- spot Ether ETFs have been struggling a little bit, with several funds experiencing consecutive days of outflows.
Why This Matters
Rising inflows into select Bitcoin ETFs during market volatility reflect growing investor confidence in Bitcoin-backed securities, led by BlackRock’s iShares Bitcoin Trust. This trend underscores the appeal of certain funds and the challenges for competitors like Grayscale, offering insights into shifting investor strategies and the evolving digital asset market.
Interested in why Solana ETFs are still pending approval? Read more here:
Solana ETFs on Hold? Here’s Why VanEck Remains Hopeful
Want to know why Bitcoin ETFs are attracting more inflows than Ethereum ETFs? Read here:
Bitcoin ETFs See $32.58M in Weekly Inflows Amid Ether’s Hiccups
