Bitcoin ETF Inflows Surge as Cryptocurrency Rebounds

Inflows into the nine recently launched exchange-traded funds (ETFs) tied to bitcoin have resumed their upward trajectory this week after the cryptocurrency’s price bounced back from its dip last week.

“The resumption in bitcoin’s strong performance is sparking renewed interest in the ETFs,” said Todd Rosenbluth, head of research at VettaFi, an analysis firm.

Significant Asset Inflows:

According to data from BitMEX Research, the nine funds that made their debut in January pulled in nearly $1 billion in assets in the first two days of this week. Wednesday’s flow data will be available on Thursday morning.

The leadership has shifted from BlackRock’s iShares Bitcoin Trust to the Fidelity Wise Origin Bitcoin Fund. The latter attracted $540.9 million in assets Monday and Tuesday, more than double the $197.7 million BlackRock’s fund drew in the same period, BitMEX data showed.

Grayscale Bitcoin Trust Continues to Buck Trend:

The one fund that continues to buck this trend is the Grayscale Bitcoin Trust, which existed as a publicly traded trust before it converted into an ETF on the same day the other nine ETFs launched. 

Since then, it has seen steady outflows, regardless of bitcoin’s price movements. In the first two days of this week, those outflows reached $562.4 million.

“At the moment, the numbers are all skewed by Grayscale,” said David Mercer, CEO of LMAX Group, an institutional cryptocurrency exchange. However large these flows may be for the ETF market, they’re “a rounding error” when compared to bitcoin’s total market capitalization, Mercer added.

Influence on Bitcoin’s Price:

Still, Mercer noted that ETF flows seem dictating Bitcoin’s price. “One thing’s for sure: the bitcoin price couldn’t rally when you saw outflows in the ETFs,” Mercer said.