By
Godfrey Benjamin
April 30th, 2024
On April 8, US spot Bitcoin ETFs suffered their worst day for net outflows since March 20, with funds experiencing a $223.8 million outflow.
Fidelity’s FBTC spot Bitcoin ETF, despite its recent launch three months ago, has unexpectedly risen as a frontrunner in the US spot Bitcoin ETF industry. The FBTC fund has surpassed a remarkable 150,000 BTC in assets under management (AUM) – a significant milestone showing the increasing institutional demand for Bitcoin.
This rapid growth seems even more remarkable when contrasted with the established Grayscale Bitcoin Trust (GBTC). Despite GBTC still holding the largest share of Bitcoin among ETFs at 38.6%, its assets under management have declined significantly since January, dropping from 619,220 BTC to 322,697 BTC – a nearly 48% decrease.
The collective AUM of all United States-based Bitcoin exchange-traded funds have reached an impressive 842,897 BTC, representing over 4% of the total circulating supply of Bitcoin. Such rapid growth suggests a significant shift in investor sentiment, favoring these transparent and potentially more cost-effective investment instruments.
FBTC Stands Strong amid Bitcoin ETF Outflows
The current slowdown in capital inflows and even outflows on some days raises questions about the short-term sustainability of this growth. On April 8, US spot Bitcoin ETFs suffered their worst day for net outflows since March 20, with funds experiencing a $223.8 million outflow. Grayscale’s GBTC was the primary driver, suffering outflows worth $303.3 million.
Despite the recent decline, Fidelity’s FBTC, and BlackRock’s IBIT ETFs have shown remarkable resilience. For an impressive 59 consecutive trading days, both funds have experienced inflows, positioning them among the top 20 longest streaks for any ETF, as reported by Eric Balchunas, a Bloomberg ETF analyst.
MOVIN ON UP: $IBIT and $FBTC have now taken cash for 59 straight days and are now in the Top 20 all-time. (That said they in league of own when it comes to active streaks or streaks for newborns) via @thetrinianalyst pic.twitter.com/3cdYorXjOT
— Eric Balchunas (@EricBalchunas) April 8, 2024
Overseeing the current market, BlackRock’s IBIT secures the premier position with 264,233 BTC (valued at approximately $17.24 billion) under its management. Following closely, Fidelity’s FBTC maintains 150,563 BTC ($9.90 billion), while Ark Invest 21Shares’ ARKB holds 43,726 BTC ($2.85 billion) in its portfolio, according to the data from Coinglass.
GBTC Falters amid Market Shift
The immense popularity of spot Bitcoin ETFs and the simultaneous decline of GBTC driven by its higher fee show a distinct preference for these modern investment vehicles. However, the recent outflows highlight the potential for short-term volatility inherent in the cryptocurrency market.
Moving forward, it will be interesting to see if Fidelity and BlackRock can maintain their momentum or if a broader market correction will dampen investor enthusiasm for Bitcoin ETFs. However, the popularity of these new investment options signifies Bitcoin’s maturing market and increasing institutional acceptance.