(Kitco News) – The launch of multiple spot Bitcoin (BTC) exchange-traded funds (ETFs) in the U.S. set new records for ETF inflows, with ‘The Nine’ surpassing $30 billion in trading volume faster than any other asset in the history of the sector.
As noted by Bloomberg Intelligence Senior ETF analyst Eric Balchunas, interest in the products from BlackRock and Fidelity has been non-stop since their January launch, with 49 straight days of inflows, a feat that only 30 ETFs have accomplished, and they are the only ones to do from launch.
$IBIT and $FBTC have now taken in cash for 49 straight days, something only 30 other ETFs have ever done (and none of them did it right out of gate). Among active streaks they 4th after $COWZ $CALF (which are over 100 days, damn) and $SDVY. Great chart from @thetrinianalyst pic.twitter.com/CUxFNFa7tN
— Eric Balchunas (@EricBalchunas) March 22, 2024
The demand has led to speculation that other digital assets could also get ETFs and be successful, with Ethereum top-of-mind for most investors. There are multiple spot Ether ETF applications being evaluated by the Securities and Exchange Commission (SEC), with several decisions due in May.
But according to Robert Mitchnick, Head of Digital Assets at BlackRock, the world’s largest asset manager is currently focused primarily on Bitcoin, and interest in other digital assets has been muted.
“For our clients, Bitcoin is overwhelmingly the number one priority,” Mitchnick said while speaking during a fireside chat at the Bitcoin Investor Day by Reflexivity Research. “And then a little bit Ethereum, and very little everything else.”
He noted that there has been a significant amount of interest from the crypto community for a broader range of crypto products from BlackRock, but for now, the firm remains focused on Bitcoin due to its fundamentals and growing prominence in global finance.
Mitchnick also suggested that traditional finance is slowly opening up to the benefits of blockchain technology and is working to integrate it with existing systems.
“Eventually we expect there will be a convergence where the best of the old system and the new technology will become fused into a new infrastructure system in finance,” he said.
With such heavy demand for access to the iShares Bitcoin Trust (IBIT), it’s easy to understand why BlackRock remains focused on Bitcoin.
According to Balchunas, “$IBIT now accounts for over half of BlackRock's net flows YTD and has taken in double any of their other 420 ETFs.”
The Bitcoin ETF from Fidelity has also been a boon for the asset manager, Balchunas said. “$FBTC making [a] bigger impact inside that firm, [accounting] for 70% of Fidelity's YTD flows and 5x more than any other of their ETFs.”
While the flows into IBIT and FBTC have been notable, they have come at the expense of Grayscale’s GBTC, which experienced a drawdown of $359 million on Thursday, bringing its total losses since the ETFs launched to $13.63 billion, a decline of 42.3% from its high.
$358.8 million out of $GBTC, outflows ain't stopping.
GBTC has now lost 42.3% of it's shares since converting to an ETF. https://t.co/bxFtNrgKsv— James Seyffart (@JSeyff) March 21, 2024
But overall, the ETFs have indeed been a huge success as the net flow stood at $11.23 billion as of Thursday, a feat achieved in just 49 days of trading.
According to Ki Young Ju, founder and CEO of on-chain analytics firm CryptoQuant, while the overall net flow has been slowing in recent days, it could soon pick up again as Bitcoin’s price approaches lower support levels.
#Bitcoin spot ETF netflows are slowing.
Demand may rebound if the $BTC price approaches critical support levels.
New whales, mainly ETF buyers, have a $56K on-chain cost basis. Corrections typically entail a max drawdown of around 30% in bull markets, with a max pain of $51K. pic.twitter.com/vZCG4F0Gh5— Ki Young Ju (@ki_young_ju) March 22, 2024
Well-known Bitcoin advocate Samson Mow, who can always be counted on to provide an optimistic take, said the outflows are only temporary and will soon reverse.
All #Bitcoin ETF outflows will eventually become inflows. Plan accordingly.
— Samson Mow (@Excellion) March 21, 2024
