Bitcoin ETFs Suffer Dip in Inflows as Bitcoin Price Drops
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Bitcoin ETFs Suffer Dip in Inflows as Bitcoin Price Drops

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Azeez Mustapha

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In a notable development within the cryptocurrency investment realm, U.S. spot Bitcoin Exchange-Traded Funds (ETFs) are witnessing a noteworthy shift in net inflows, reflecting a cautious sentiment among investors amid Bitcoin’s recent retracement from its peak.

On Thursday, the net inflows for these ETFs plunged to a monthly low of $132.5 million, primarily due to a substantial $257.1 million outflow from the Grayscale Bitcoin Trust (GBTC).

However, despite this downturn, the cumulative net inflows since the inception of spot Bitcoin ETF trading on January 11 have surged to nearly $12 billion, equivalent to over 211,000 bitcoins, according to The Block.

Leading the pack, BlackRock’s IBIT ETF continued its dominance, garnering an additional $345.4 million in inflows, according to data from The Block’s Data Dashboard. VanEck’s HODL ETF followed with $13.8 million in inflows, benefiting from a temporary fee waiver. In a surprising turn, Fidelity’s FBTC ETF, typically a strong performer, witnessed its inflows dip to $13.7 million, the lowest since its launch.

The increasing interest in Bitcoin ETFs is evident, with Cetera Financial Group recently endorsing several ETFs, including BlackRock’s IBIT and Fidelity’s FBTC, for client investment portfolios. Matt Fries, Cetera’s Head of Investment Products, emphasized the firm’s strategic approach to integrating these innovative investment vehicles.

Nate Geraci, President of the ETF Store, highlighted the growing excitement around Bitcoin ETFs, noting that financial advisory firms are leveraging them as a competitive edge.

In terms of trading volume, the spot Bitcoin ETFs recorded their third-largest day, with a combined volume of $7.98 billion. BlackRock’s IBIT led with $3.92 billion, followed by Grayscale’s GBTC and Fidelity’s FBTC. Notably, IBIT is nearing a 50% market share by volume, underscoring its growing prominence.

Bitcoin ETFs Suffer Dip in Inflows as Bitcoin Price Drops
Image via The Block’s Data Dashboard

Bitcoin ETFs Shine in March Despite Current Dip in Inflows

The trading activity for Bitcoin ETFs has surged this month, outpacing the volumes of January and February combined. Bloomberg’s ETF analyst Eric Balchunas shared that March’s halfway mark has already seen a staggering $65 billion in volume, setting a new precedent for the sector.

With the cumulative trading volume for all spot Bitcoin ETFs standing at $135.9 billion, it’s evident that these instruments are carving out a significant niche in the investment world, offering both opportunities and challenges as the market continues to evolve.

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