Bitcoin ETF Flows Flip to Positive After Two Weeks, Bitwise CIO Flashes Massive Adoption

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As a seasoned crypto investor with over a decade of experience navigating the tumultuous waters of digital assets, I find the recent surge in Bitcoin ETF inflows to be a promising development. After two weeks of steep outflows totaling over $1.2 billion, the positive inflows of $28.6 million into Fidelity’s FBTC and Bitwise’s BITB, coupled with Bitcoin’s price rebound, provides a much-needed relief in the market sentiment.

After two consecutive weeks of significant withdrawals totaling more than $1.2 billion from spot Bitcoin ETFs, there’s now a reversal of flow as these investments have become positive. This change coincides with Bitcoin’s price recovery and a surge of approximately 4.40%, reaching $57,100 at the time of press. Bitcoin has shown resilience following the recent weekend drop to $54,000, indicating a shift in market sentiment. Despite recent market criticism towards ETFs, Bitwise CIO Matt Hougan has spoken up in their defense, emphasizing that financial advisers continue to express interest in them.

Bitcoin ETF Inflows Resume Amid Shift In Market Sentiment

According to Farside Investors’ figures, Bitcoin spot ETFs received a combined total of approximately $28.6 million on Monday. Specifically, Fidelity’s FBTC attracted $28.6 million, while Bitwise’s BITB recorded inflows of around $22.0 billion. Conversely, Grayscale’s GBTC experienced outflows totaling $22.8 million, and BlackRock’s IBIT saw outflows amounting to $9.1 million.

Yesterday’s influx offers significant respite following two weeks of continuous outflows. Some within the cryptocurrency sector are now suggesting that Bitcoin ETFs are weakening, coinciding with a downturn in the overall Bitcoin market mood.

Leading figures in the industry express approval for Bitcoin Exchange-Traded Funds (ETFs). Analyst Eric Balchunas from Bloomberg maintains a positive stance on these ETFs, commenting that recent outflows of $1.2 billion are insignificant compared to the $46 billion Assets Under Management (AUM) of these ETFs. He considers this as normal market activity and suggests that the outflows are not substantial enough to warrant significant worry.

Bitwise CIO Disputes Claims of Dropping Adoption Rates

Jim Bianco of Bianco Research shared his opinion last week that Bitcoin ETFs are losing ground among investment wealth advisers and that their adoption is very “small”, thereby downplaying the investment product. Refuting this, Bitwise CIO Matt Hougan added that Bitcoin ETFs are seeing faster adoption rates among investment advisors than any other new ETFs in history.

Speaking about BlackRock’s IBIT ETF specifically, Hougan noted that it has garnered $1.45 billion in investments from financial advisors, making it the second fastest-growing ETF launched this year, with the exception of Bitcoin-related ETFs. Interestingly, he contrasted this with the KLMT ETF, which initially received a $2 billion investment from a single entity, but has seen minimal involvement from financial advisors.

In other words, the Chief Investment Officer at Bitwise highlighted the fact that though investment managers make up a relatively small portion of Bitcoin ETF purchasers, their interest in these financial tools has been extraordinary and unlike anything seen before.

It appears that Jim is mistaken: Bitcoin ETFs are being adopted by investment advisors more rapidly than any other ETF introduced so far.

Let’s look at his own data, focused on IBIT, the BlackRock ETF.

According to the data he’s presented, IBIT has received approximately $1.45 billion in total inflows from investment advisors. However, he describes this figure as “modest”.

— Matt Hougan (@Matt_Hougan) September 9, 2024

It’s worth noting that the recent surge in Bitcoin’s value has significantly contributed to the increased inflows. Currently, the Bitcoin price stands at approximately $57,107.12, representing a 4.4% increase, and it holds a market capitalization of about $1.130 trillion.

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2024-09-10 10:46