Bitcoin (BTC) continues to defy the expectations of many analysts as the top crypto has thus far managed to avoid a double-digit correction following its run-up from $50,600 to a 27-month high of $64,100 over the past week.
The rally came amid surging trading volumes and inflows into the recently launched spot BTC exchange-traded funds (ETFs), which took in a record $673 million in value on Wednesday, surpassing the inflows recorded on their first day of trading.
BlackRock’s IBIT remains the favorite among investors, accounting for $612 million of the inflows recorded yesterday, lifting its total assets under management above $9 billion.
To help put the success of the IBIT into context, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas tweeted, “Only one or two other ETFs on the planet are taking in cash as fast as $IBIT right now. Gonna hit $10b tomorrow probably. Easily [the] fastest ever at 7 weeks. For context, it took $GLD over two years to hit 10b, VOO over 3 years.”
Even for a firm like BlackRock, which has more than $9 trillion in assets under management, the focus on IBIT has been notably high since launching. “$IBIT makes up 0.2% of BlackRock's ETF lineup but has accounted for 42% of its net flows this year,” Balchunas said. “$FBTC makes up 2% of Fidelity's ETF lineup but has accounted for 64% of its net ETF flows this year.”
Combined, “The Nine” spot BTC ETFs have accounted for a large percentage of the total ETF flows, but they still have a lot of ground to cover if they want to challenge the king of ETFs – Vanguard.
“The Bitcoin ETFs have taken in 9% of all net inflows into ETFs this year,” Balchunas noted. “That said, Vanguard ETFs have taken in 51% of the flows = why we remain bullish on both Vanilla and hot sauce.”
Data provided by TradingView shows that following yesterday’s midday whipsaw, Bitcoin’s price stabilized above support at $61,000 and has since climbed higher, topping out near $63,680 in early trading on Thursday before pulling back to support at $62,000, where it trades at the time of writing.
BTC/USD Chart by TradingView
“This recent BTC rally is being driven by record-setting inflows as $8 billion worth of net new demand has poured into the nine new bitcoin ETFs over the last 60 days,” said Matt Ballensweig, Head of Go Network at BitGo, in a note to Kitco Crypto. “What we are seeing are historic, record-setting levels of activity. Pandora’s Box has now been opened. Institutional demand is officially here and we have two of the largest asset managers in the world, BlackRock and Fidelity, participating in catalyzing further adoption."
Ballensweig noted that over the past couple of months, “Institutional demand has predominantly driven market activity, particularly through new ETF inflows. However, it seems retail participation is starting to resurge. For example, the number of unique transactions amongst the top Bitcoin ETFs yesterday was greater than the number of transactions on SPY and QQQ, which could indicate smaller, retail-driven buying.”
“Additionally, meme coins like DOGE/USDC rallied today by 15%, underscoring a potential new wave of retail participation,” he added. “Lastly, we've seen rising funding rates across BTC and alts, indicating a surge in leveraged buying across many of the retail exchanges. While retail may be late to the game, there's still potential for a significant wave of participation to complement ongoing institutional adoption.”
Ballensweig said the approval of the Bitcoin ETFs and the emergence of large asset managers endorsing Bitcoin has ushered in an era of institutional adoption that “has opened new doors for the crypto market.”
