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The initial excitement surrounding spot Bitcoin ETFs seems to have waned, and reality is gradually setting in, with recent inflows unable to keep up with the still rapid outflows from Grayscale Bitcoin Trust (GBTC).
On April 12th, the inflows to the Fidelity Wise Origin Bitcoin Fund (FBTC) were $0, breaking the streak of daily net inflows since its launch on January 11th. This makes BlackRock's iShares Bitcoin Trust (IBIT) the only spot Bitcoin ETF to continue seeing consistent inflows since its inception.
For most remaining funds, including Invesco Galaxy Bitcoin ETF (BTCO), VanEck Bitcoin Trust (HODL), and Valkyrie Bitcoin Fund (BRRR), zero inflows or occasional outflows have become the norm.
Bloomberg Intelligence ETF analyst James Seyffart noted in an article on X that this isn't uncommon. He pointed out that approximately 83% of ETFs in the U.S. market had zero net inflows on Monday.
Seyffart explained that ETF shares are created and redeemed only when there is a significant mismatch in supply and demand and when the cost is lower than the hedging cost. For Bitcoin ETFs, the number of creation units varies from 5,000 shares to 50,000 shares. Seyffart wrote, "Even a slight mismatch will have market makers treating the ETF like they would treat trading a stock."
However, the recent slowdown doesn't mean traders need to get used to reduced flow. While the initial sentiment surrounding ETFs during their early weeks of inception certainly led to volumes higher than any other ETF before, traders may see more significant positive fund flows in the future.
Samir Kerbage, Chief Investment Officer at Hashdex, said, "There's definitely potential for inflows to rebound." The company converted its Bitcoin futures fund into a spot Bitcoin ETF in March.
Kerbage continued, "Many global banks, endowment funds, and pension funds are just now starting their due diligence before considering strategic allocations to BTC through the newly launched ETFs. As these large financial institutions make decisions in the coming months, inflows are likely to increase again, potentially reaching new milestones and becoming one of the most successful ETF launches in U.S. history."
Regarding Grayscale's Bitcoin Trust Fund (GBTC), Seyffart doesn't expect a reversal, with the trust still seeing daily outflows of 1,000 bitcoins or more. He told CoinDesk, I don't really expect net inflows into GBTC as it stands. With the 1.5% fee on GBTC, I would be surprised if there were any days of net inflows; I would be shocked if there were sustained inflows over any period of time. |
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Post time 21-4-2024 21:34:14