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May 17, 2024 by Lipika Deka
Post-halving, Bitcoin ETF volume has bounced back strongly, with the seven largest ETFs hitting $5.65 billion, the highest day since March 24th. This comes as Grayscale Investments’ GBTC recorded the first inflows, ending a 78-day streak of net outflows and displaying signs of renewed investor interest. On May 6th, GBTC recorded its second consecutive day of net inflows, bringing in $4 million, according to SpotOnChain.
Fueling the growth is the recent entry of a handful of hedge funds, including New York-based Millennium Management LLC, and other asset managers that acquired stakes in the recently launched U.S. exchange-traded funds in the first quarter, per the latest regulatory filings.
Millenium disclosed a $2 billion investment in various new ETFs by March 31, including BlackRock’s iShares Bitcoin Trust [IBIT.O], the Grayscale Bitcoin Trust, and funds from issuers like Bitwise Investments and ARK Investment Management. The State of Wisconsin Investment Board also gained attention after news of their investment in BTC ETFs. Community reactions were euphoric, with some suggesting that this could trigger a chain reaction. As per the Bitwise report, 563 professional investment firms reported owning $3.5 billion worth of bitcoin ETFs as of May 9. By the May 15 filing deadline, experts expect over 700 firms and a total AUM nearing $5 billion.
This scale of ownership is off the charts for a new ETF. Most ETFs attract very few 13F filers in their first few months on the market. Bloomberg ETF analyst Eric Balchunas called the number of large-scale investors in the bitcoin ETFs “bonkers.”
Bitcoin ETFs Echo Gold’s Record-Breaking Launch
Bitwise CEO Matt Hougan believes that BTC ETFs have emulated the soaring success of gold ETFs launched in late 2004. At the time, the gold ETF launch was deemed the most successful ETF launch ever, amassing over $1 billion in its initial five days on the market. However, during its first 13F filing, only 95 professional firms had invested in the gold ETFs. From an ownership breadth standpoint, the bitcoin ETFs have achieved historic success, Hougan wrote.
In a sign of shifting winds, Vanguard fired its CEO, who previously blocked BTC ETFs, and has hired the individual who oversaw IBIT as the new CEO. The change of guard has sparked market discussions about a shift in strategy and a departure from tradition.
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