This week, US Bitcoin ETFs recorded significant inflows, which suggests a sustainable increase in interest from institutional investors.
Inflows Dynamics in Bitcoin ETFs
This week saw Bitcoin ETFs experiencing inflows exceeding $2.72 billion. In particular, on the fourth and fifth days, inflows of $1.03 billion and $1.17 billion were recorded respectively. This marks the first instance of back-to-back inflows since the funds launched in January 2024. According to Nate Geraci, president of NovaDius Wealth Management, only seven days since launch have exceeded $1 billion, with two of those days occurring in the last two days.
Impact on Bitcoin Market
These inflows are supporting Bitcoin's price increase, which hit $112,000 earlier in the week and climbed to $118,780 by Friday, according to CoinMarketCap. The inflow from ETFs significantly exceeded Bitcoin's natural supply: approximately 10,000 Bitcoin were purchased in a day, while the network produced only 450 coins. Furthermore, BlackRock's Bitcoin ETF became the fastest to surpass $80 billion in assets under management.
Implications for Cryptocurrency Industry
Growing assets in Bitcoin ETFs may change Bitcoin's position in traditional finance. The total assets of all Bitcoin ETFs have now exceeded $140 billion. However, it is noteworthy that Bitcoin's price surge played a crucial role in achieving this milestone. BlackRock now earns more revenue from its IBIT fund than from its flagship S&P 500 fund. Notably, IBIT now holds over 55% of all US Bitcoin ETF assets, creating concentration risks within Bitcoin ownership.
Record inflows into Bitcoin ETFs highlight the growing interest of institutional investors in cryptocurrency and may significantly impact its acknowledgment in traditional financial spheres.
