The past few days have seen a surge in investment into Bitcoin ETFs, with BlackRock's iShares Bitcoin Trust amassing over 105,000 BTC. This uptick highlights the increasing confidence of institutional investors in digital assets.
Bitcoin has risen past the $52,000 mark for the first time since December 2021, and at the time of writing, appears to be holding. This time, the rally seems to be driven not by retail investor FOMO (fear of missing out), but by the entrance of institutional investors into the market.
Just over a month has passed since the green light was given to spot Bitcoin ETFs. The early phase saw cautious inflows and some outflows, but the rate of inflows has recently picked up pace significantly. This shift indicates the potential onset of a broader trend.
Data from crypto-etfs.com reveals that spot Bitcoin ETFs saw an inflow of about 51,000 BTC ($2.6 billion) in their first complete month on the market. Yet, in just the past few days, inflows have hit over 84,000 BTC ($4.3 billion), with daily increments of around 10,000 BTC. This surge is likely a major contributor to Bitcoin’s sharp price increase.
Source: crypto-etfs.com
The competition among the spot ETF providers is also heating up. With over 105,000 BTC under its belt, BlackRock’s iShares Bitcoin Trust is at the forefront, witnessing the most substantial growth among spot ETFs with daily additions exceeding 5,000 BTC. Fidelity’s ETF secures second position, with a steadier pace of about 3,000 BTC added daily.
To draw in new investors, some ETF providers are getting creative. For example, VanEck rolled out a unique Valentine’s Day campaign for its spot BTC ETF, urging investors to “HODL VanEck in your heart this Valentine’s Day,” promoted on its Instagram stories. However, despite VanEck’s creative marketing, its growth has been more gradual, with a total accumulation of around 3,000 BTC.
Source: instagram.com
When we step back and assess the recent surge and the progress over the past month, it is clear that it has exceeded many investors’ expectations. Galaxy’s forecast, for instance, had pegged the total inflow into Bitcoin ETFs at about $14 billion for the first year.
However, with $4.3 billion already garnered in just over a month, the amount could potentially reach $40-50 billion within a year if the trend persists. Such a figure would mark a significant milestone for the nascent ETF product.
Interestingly, as digital gold (Bitcoin) ETFs are witnessing a surge, their tangible counterpart, real gold ETFs, have seen significant withdrawals in 2024. Eric Balchunas, a Bloomberg intelligence analyst, highlighted that the 14 leading gold ETFs have experienced outflows totaling $2.4 billion so far this year.
Investors are clearly moving funds from traditional safe havens and deploying them into more interesting assets, which is another good sign for Bitcoin, and the broader crypto market.