By
Chimamanda U. Martha
May 20th, 2024
Earlier this week, GBTC recorded daily net inflow after a very long time of constantly seeing outflows.
The flow situation of spot Bitcoin ETFs seems to be declining daily as Wednesday saw another intriguing situation.
According to data from SoSo Value, only Bitwise’s Bitcoin ETF BITB recorded inflows of about $12 million on May 8. This leaves other spot Bitcoin ETF issuers including BlackRock Inc (NYSE: BLK), Fidelity Investments, Grayscale Investments, and VanEck, without net inflows or even outflows.
Spot Bitcoin ETFs: From Inflows to Massive Outflows
These investment asset management firms received approval from the United States Securities and Exchange Commission (SEC) for their respective listings in January. Since that time till now, they have collectively registered more than $11.77 billion in net inflows.
By February, BlackRock’s IBIT had recorded $3.1 billion in inflows and this made it the fifth-largest of all US ETFs.
The values recorded were quite encouraging, leading to a bold prediction from JMP Securities. Precisely, analysts from JMP Securities speculated that spot Bitcoin ETF inflows would climb to $220 billion within the next three years. This potential boost would have to push Bitcoin price about 4x from its current level to $288,000.
March saw the peak of this Bitcoin ETF inflows but it also marked the beginning of a sharp decline for the spot Bitcoin ETFs. From there on, the outlook of these offerings has worsened. On April 24, BlackRock’s IBIT saw an end of its 71-day streak of positive flow after it registered a flat $0 inflow.
BTC Markets crypto analyst Rachael Lucas stated:
“Days with zero inflows are typical and not indicative of product failure […] It also coincides with market performance and geopolitical tensions, highlighting complexities beyond ETF flows.”
Grayscale GBTC Still Leads Outflows
As of April 24, Grayscale Bitcoin Trust ETF also joined BlackRock in the erratic flow trend. The asset experienced a substantial net outflow of $130 million. Fidelity’s Bitcoin ETF defied this bearish order and printed an increase of $5.61 million. Ark 21Shares Bitcoin ETF closely followed, with a net inflow of $4.172 million.
Fidelity’s spot Bitcoin ETF (FBTC) saw its first day of net outflows on April 25. This capital exodus was valued at $22.61 million. However, earlier this week, FBTC led the net inflows with $99 million.
Grayscale GBTC has seen a more significant percentage of these outflows ever since it converted to a spot Bitcoin ETF. At some point, many market observers attributed the massive outflows from GBTC to its sponsor fee of 1.5%, the highest amongst its peers.
Earlier this week, GBTC recorded daily net inflow after a very long time of constantly seeing outflows.
The inflows from the Sonnenshein-led Bitcoin ETF amounted to $4 million. Data from Grayscale’s website shows that this time, its Bitcoin holding has gone from 619,220 BTC as of January 11 to the current 292,217 BTC ($18.4 billion).
Grayscale’s net outflows are currently pegged at $17 billion, according to SoSo Value data.