Inflows for Bitcoin ETFs Reach $20 Billion in Just 10 Months
Farside Investors’ Latest Report
The spot Bitcoin Exchange-Traded Funds (ETFs), which the US Securities and Exchange Commission (SEC) approved in January, have achieved a new milestone. According to Farside Investors’ latest report, these ETFs have processed over $20 billion worth of inflows over the last ten months. Of the $20 billion, wall Street giant BlackRock’s Bitcoin ETF iShares has seen the most inflows ($11 billion).
In the world of ETFs, flows measure how well an investment product is performing by showing the money being invested and withdrawn from it.
While investors have poured billions of dollars into various ETFs, they have also withdrawn significant amounts of money from Grayscale’s Bitcoin ETF, GBTC. But why? One may ask. Well, before the US SEC allowed Grayscale to convert its Bitcoin Trust to an ETF early this year, investors couldn’t redeem their shares.
However, when the Trust became an ETF, investors were able to cash out their gains, causing GBTC to witness massive outflows. Also, Grayscale’s trading fees were a bit higher than competitors, prompting some investors to liquidate their shares and seek alternatives.
Grayscale Bitcoin ETF Records Net Inflows After Weeks of Bleeding
Notably, investors have started injecting funds into Grayscale’s Bitcoin ETFs, as evidenced by the increased inflows. Farside Investors’ data shows GBTC has recorded $135 million worth of inflows over the past five weeks.
Meanwhile, well-known ETF expert Eric Balchunas has revealed on his X account that it took Gold ETFs roughly five years to attain inflows of $20 billion. He says a conducive regulatory environment can push inflows for spot Bitcoin ETFs to $50 billion by the end of next year.
Why Are Inflows Surging Again?
When the SEC approved ten spot Bitcoin ETFs in January, institutional investors poured massive capital into the new investment products due to excitement about getting exposure to Bitcoin without taking the responsibility to hold the coin.
However, inflows slowed down in mid-2024 as uncertainty over how the US central bank would address high interest rates grew. But when the Fed cut the rates in September, investors’ appetite for risky assets got a boost. This explains the recent surge in inflows into Bitcoin ETFs.
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