US Bitcoin ETFs hit $17B in Inflows, BlackRock’s IBIT Dominates Trading

US spot Bitcoin exchange-traded funds (ETFs) have logged over $17 billion in net inflows after another successful trading week. According to data from Farside, these funds captured over $2 billion in inflows over the past two weeks, with BlackRock’s IBIT and Fidelity’s FBTC being key contributors to the inflow surge.

Grayscale’s GBTC saw huge outflows amid the US Bitcoin ETF boom, but the spot Bitcoin funds have seen a steady rise in investor interest.

Farside’s data shows that BlackRock’s IBIT has attracted around $18.9 billion in inflows since its debut in January. As of July 18, IBIT manages over $20.6 billion worth of Bitcoin and is also the world’s largest spot Bitcoin ETF.

BTC ETFs Are Popular

Fidelity’s FBTC has also seen large inflows, contributing to the overall trend. Investors have poured over $9.9 billion in Bitcoin into the fund over the last six months.

Meanwhile, ARK Invest’s ARKB reported $2.6 billion in net inflows, taking third place and followed by Bitwise’s BITB, with $2.2 billion in inflows. Other funds, including VanEck’s HODL, Valkyrie’s BRRR, Franklin Templeton’s EZBC, Invesco’s BTCO, and WisdomTree’s BTCW, also saw growing inflows.

In contrast, Grayscale’s GBTC has suffered a substantial decline, recording approximately $18.7 billion in net outflows. GBTC still has $18.2 billion worth of Bitcoin under management, according to data from Grayscale.

In March, GBTC experienced daily outflows peaking at $600 million, with total outflows reaching $15 billion over three months. However, recent reports show that these outflows may be stabilizing.

Michael Sonnenshein, Grayscale’s CEO, said the outflow trend might be nearing equilibrium as the market adjusts. Sonnenshein added that Grayscale may lower its fees to remain competitive against new entrants in the ETF space as the market matures.

Shifting Trends

Following the approval of several spot Bitcoin ETFs in the US, many investors are believed to have shifted their capital from GBTC to these new offerings as they charge lower fees, making GBTC less attractive.

Grayscale currently charges an annual management fee of 1.5% for its Grayscale Bitcoin Trust, which is considered quite expensive compared to other competitors.

Some of GBTC’s outflows are linked to the liquidation of assets by bankrupt crypto firms, such as FTX and Genesis. These companies had shares of GBTC on their balance sheets and could sell these shares to settle debts.

Despite Grayscale’s outflows and recent fluctuations, US spot Bitcoin ETFs have still seen a steady rise in investor interest, amassing $16.59 billion in net inflows before reaching the current record.

Big Investors Buy

According to Bloomberg ETF analyst Eric Balchunas, the net inflows into Bitcoin ETFs are a strong indicator of the growing institutional interest and adoption of Bitcoin. He also noted that the increase wasn’t influenced by whether Bitcoin’s price went up or down.

Spot Bitcoin ETFs’ flows have recently moved independently of Bitcoin’s price. Throughout the week of July 8 when Bitcoin was affected by German authorities’ liquidation, these funds collectively captured over $1 billion in net inflows, Farside’s data shows. At the time, Bitcoin was stuck between $57,000 and $58,000.

Bitcoin has surged by 12.5% to $67,500 over the past week, according to data from CoinGecko. Bullish momentum has returned following easing selling pressure from the German government. With the selling over, it looks like BTC may go higher in H2, 2024.

The German government sold over 50,000 Bitcoin, amounting to approximately $2.9 billion. The large-scale sell-off was completed within a span of 24 days, concluding on July 12. The liquidation contributed to a notable decline in Bitcoin’s price, which briefly dipped below $55,000 during the liquidation period.

Analysts are optimistic about a potential rebound in Bitcoin’s price following the end of this liquidation phase, as the market stabilizes and institutional interest remains strong. Investors are looking for exposure to cryptos, and BTC ETFs appear to be a popular choice.