Recently, we witnessed an extraordinary event in the cryptocurrency market: a substantial influx of Bitcoin into several spot Bitcoin ETFs. On their fifth trading day, these ETFs collectively added a staggering 10,667 Bitcoins to their holdings amid increasing trade volumes.
This move represents a notable shift in the investment landscape, with Bitcoin gaining increased legitimacy and acceptance among mainstream investors. BlackRock’s ETF, in particular, stood out, accounting for a considerable portion of the purchases.
With 8,700 BTC added, worth nearly $358 million, BlackRock’s move underscores the growing interest and confidence in cryptocurrency as an investment asset. This data, compiled by the X (formerly Twitter) account CC15Capital for January 17th, highlights a net increase of $440 million in Bitcoin added to the holdings of these ETFs by the day’s end.
In contrast, the data shows a continued outflow from Grayscale’s Bitcoin Trust (GBTC), with 10,824 BTC, approximately $445 million, being offloaded. Since its conversion to a spot ETF on January 11, nearly 38,000 BTC has left GBTC.
These contrasting flows between different funds illustrate the dynamic and rapidly changing landscape of Bitcoin investments.
Trading Trends and Market Impact
The impact of these new ETFs, affectionately dubbed the “Newborn Nine” by Bloomberg ETF analyst Eric Balchunas, has been significant.
Excluding GBTC, these new spot Bitcoin ETFs have seen a 34% jump in daily volume as of their fifth day of trading. This surge defies the typical pattern observed with hyped-up launches, where trading volume tends to decrease steadily after the initial launch.
The reverse trend observed here signals a growing investor interest in cryptocurrency through more traditional investment vehicles like ETFs.
Another way to put the bitcoin ETF flows in ETF context (besides showing their #s relative to past new launches) is how they stack up to ALL ETFs in past 1 week flows.
However, it’s important to note that the data around Bitcoin buying, as reported by ETF managers, often comes with a delay compared to each fund’s transaction volume figures.
This delay is due to the time taken for the purchase settlements. The enthusiasm for these new funds is evident in the rapid accumulation of assets under management. BlackRock and Fidelity’s Bitcoin ETFs each boasted over $1 billion in assets at the close of trading on January 18, according to data from Bloomberg ETF analyst James Seyffart.
This milestone marks a significant achievement for cryptocurrency-based investment products, highlighting the growing acceptance and popularity of Bitcoin as an investment asset. Balchunas further pointed out that BlackRock and Fidelity’s Bitcoin ETFs are now in the fourth and fifth position for weekly capital inflows across all U.S.
ETFs. They trail only behind the Vanguard 500 Index Fund ETF, a bellwether fund aiming to mirror the returns of the S&P 500 index.