Bitcoin ETFs Experience Unprecedented Surge: Remarkable Inflow of $2.2 Billion Within a Week
From February 12 to 18, there was a remarkable surge of over $2.2 billion in investments into Bitcoin ETFs, according to senior Bloomberg analyst Eric Balchunas. This exceeded expectations and surpassed the inflows into any other ETF out of the 3,400 available in the United States.
Despite the rapid growth of the crypto sector and the attention garnered by Bitcoin ETFs, Vanguard remains a stronghold of traditional finance. Since the launch of Bitcoin ETFs, Vanguard has attracted an astonishing $30 billion in investments. This figure is six times greater than the achievements of Bitcoin ETFs, highlighting Vanguard’s commitment to its founder Jack Bogle’s vision. Vanguard remains resolute in its decision to not engage with the cryptocurrency market, even going as far as removing futures-backed Bitcoin funds from its platform. The #BoycottVanguard movement on social media platforms has been unsuccessful in swaying Vanguard’s steadfast approach, reaffirming the firm’s dedication to value-generating assets rather than speculative cryptocurrencies.
In terms of Bitcoin ETF inflows, BlackRock’s iShares Bitcoin Trust (IBIT) was the frontrunner, attracting $1.6 billion during the week. Notably, IBIT has invested $5.2 billion year-to-date, accounting for 50% of BlackRock’s total net ETF flows. Balchunas describes BlackRock’s Bitcoin ETFs as the “TradFi Moby Dick,” surpassing their competitors. The differences in unrealized gains among various funds, particularly when comparing IBIT with Invesco-Galaxy’s BTCO fund, reveal distinct buying patterns and dollar-cost averaging strategies.
Bitcoin’s recent price gains, experiencing a 91% surge in the past four months, can be attributed to the anticipation of spot Bitcoin ETF approval by the U.S. SEC on January 10. Balchunas stated, “The 10 bitcoin ETFs netted +$2.3b last week.” The significant influx of funds into Bitcoin ETFs has coincided with Bitcoin’s positive price momentum. During the week, Bitcoin’s value increased by nearly 7% and was trading at $52,100 at the time of writing. Central banks are also taking notice, as a trade group coalition is urging the SEC to consider modifications that would allow banks to act as custodians of BTC funds.
However, it is important to note that while Bitcoin ETFs continue to attract substantial investments, Balchunas points out that “Again, this is all net GBTC bleed.” The Grayscale Bitcoin Trust experienced a notable outflow of $624 million from February 12 to 16. Nevertheless, the crypto community is buzzing with excitement as Bitcoin ETFs continue to grow.