The Decline of Inflows in Bitcoin Exchange-Traded Funds (ETFs)
The iShares Bitcoin Trust (IBIT) managed by BlackRock has recently hit a significant milestone by experiencing zero inflows for the first time since the debut of Bitcoin exchange-traded funds (ETFs) in the United States. This marks the end of a 71-day streak during which the ETF regularly received substantial investments on a daily basis.
It’s not just IBIT that is seeing a slowdown in inflows – other Bitcoin ETFs like the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB) have also witnessed a decrease in investor interest. While FBTC and ARKB managed to attract inflows of $5.6 million and $4.2 million respectively, many other Bitcoin ETFs did not see any daily inflows.
Despite the recent decline in operations, IBIT has shown exceptional performance since its launch in January. The ETF has amassed approximately $15.5 billion in assets under management in just 71 days, surpassing the U.S. Global Jets ETF and ranking among the top 10 ETFs with the longest streaks of daily inflows.
Factors Influencing ETF Inflows
The slowdown in ETF inflows has been attributed to various macro factors such as rising Treasury rates and geopolitical events in the Middle East. Some experts believe that the initial wave of ETF purchases may have peaked, and future inflows could depend on the inclusion of spot Bitcoin ETFs in larger macro funds.
Grayscale’s GBTC, a popular investment vehicle for Bitcoin, has been experiencing regular daily outflows. On a day when GBTC recorded net withdrawals of $130.4 million, most Bitcoin ETFs did not see any net inflows. In response to these outflows, Grayscale is preparing to launch a new “mini Bitcoin ETF” with lower costs to compete with other firms and attract more investors.
Future Prospects for Bitcoin ETFs
Despite the recent decline in inflows, there are signs that interest in Bitcoin ETFs could pick up again. Reports suggest that Morgan Stanley is considering allowing its 15,000 brokers to promote Bitcoin ETFs to their clients, potentially leading to more capital flowing into these funds. Additionally, the bank’s earlier prediction that Bitcoin would reach $150,000 by the end of the year still stands.
While the current trend shows a slowdown in Bitcoin ETF inflows, the future remains uncertain as various factors continue to influence investor interest in these funds.
Tags: Bitcoin, ETFs, IBIT, BlackRock, Fidelity, Grayscale, Morgan Stanley
