US Spot Bitcoin ETF Products Records $17B In YTD Net Flows

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As a seasoned financial analyst with extensive experience in the ETF market, I find the recent performance of spot Bitcoin ETFs to be quite remarkable. Having closely followed the developments in this space for years, I can attest that the $17 billion YTD net flows reported as of July 19 is a significant milestone.

Six months after its debut, Bitcoin ETFs have been showing outstanding performance in the market. By July 19, these ETFs had attracted a total of over $17 billion in investments this year.

Spot Bitcoin ETFs Hit New Milestone

Eric Balchanus, a senior analyst at Bloomberg ETF, pointed out that this marking represents a first for the offering. In his assessment, this key metric is noteworthy because it signifies “net demand and adoption, separate from GBTC unlocks and irrespective of price growth.” Essentially, it’s an indicator of genuine interest in the product that can only increase through expanding demand. At present, it’s on an upward trend.

For the first time in 2021, Bitcoin Exchange-Traded Funds (ETFs) collectively reached over $17 billion in net inflows. This is a significant figure to observe because it represents the total amount of new investments in these funds, separate from any price increases and independent of Grayscale Bitcoin Trust (GBTC) unlocking. Essentially, this number is an authentic reflection of the growing demand and adoption for Bitcoin through ETFs, which can only increase if more investors choose to invest. Although it’s possible for net flows to decrease, the current trend is upward.
— Eric Balchunas (@EricBalchunas) July 20, 2024

Over the past four days, the total net flows for all nine Bitcoin ETFs available in the US have surpassed $16.1 billion. The trading activity for these ETFs has experienced a substantial increase. Among them, Blackrock’s IBIT held the largest trading volume with approximately $1.2 billion exchanged daily. Fidelity’s FBTC followed closely with over $410 million in daily transactions.

The current year-to-date (YTD) figure provides insight into the success of specific Bitcoin Exchange Traded Funds (ETFs) from BlackRock, Fidelity, Grayscale, Franklin Templeton, VanEck, ARK 21Shares, and Bitwise during the past six months. Notably, BlackRock’s IBIT Bitcoin ETF has amassed over $18.5 billion in assets under management (AUM) within this period.

After seeing a substantial $260 million investment, the product acquired a grand sum of 4,005 Bitcoin from the open market in just one day.

On Friday, Fidelity’s FBTC displayed notable growth, attracting approximately $141 million in investments, surpassing IBIT from BlackRock which gained around $116 million. Moreover, Grayscale’s GBTC experienced an intake of about $20 million in inflows.

The Fidelity Bitcoin Exchange-Traded Fund (ETF) is approaching a significant achievement, with assets under management (AUM) exceeding $10 billion imminently. At the end of last week’s trading, the fund had amassed a total AUM of $9.962 billion.

Institutional Investors Drive Adoption

Among the various players in the Bitcoin market, the role of institutional investors is significant and should not be disregarded. As Julian Fahrer, Co-Founder of Apollo Sats, points out, data from 13F filings indicate a notable rise in Bitcoin ETF investments among institutional investors. Specifically, approximately 79% of these institutions have boosted their holdings in such products. Conversely, just over 12.5% have reduced their Bitcoin ETF exposure.

Based on ongoing backing and visibility, it’s anticipated that the aggregate Bitcoins held by US Bitcoin ETFs could surpass the 1 million mark by the end of this month. The figure had just exceeded 900,000 units this past week.

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2024-07-20 19:46