News - Bitcoin ETFs prove their strength

By Luc Vesters

Bitcoin ETFs prove their strength

Bitcoin (BTC)
Bitcoin ETFs prove their strength

After a modest start to the week, U.S. Bitcoin ETFs picked up in the second half of last week. On Thursday and Friday, index funds enjoyed net inflows of more than USD 200 million each. According to data from Farside Investors, total net inflows over the past week amounted to USD 484.5 million. BlackRock's popular Bitcoin Trust (IBIT) was particularly strong, with impressive inflows of USD 811.2 million alone. At the time of writing, BTC listed USD 71,600, up 6.3 percent over the past 48 hours.

According to Dune, the Bitcoin ETFs have already totaled 834,600 BTC, representing 4.24 percent of the total supply currently in circulation. This means that Bitcoin funds, and the BlackRock product in particular, are exceeding all prediction, leaving even Larry Fink, CEO of the world's largest asset manager, "pleasantly surprised." There was an unusual development on Tuesday, however, when for the first time it was not GBTC that had the highest daily net outflows, but the ARK 21Shares Bitcoin ETF. Nearly USD 88 million flowed out of the fourth-largest BTC spot ETF from Ark Invest, the US investment firm founded in 2014 by Cathie Wood.

BlackRock versus Grayscale - Flippering in sight

Yet the Grayscale Bitcoin Trust was again primarily responsible for capital outflows. Once launched as a pioneering product, the GBTC lost USD 737.8 million last week, leaving its market share at only 39.1 percent. If Grayscale continues to lose Bitcoin at this rate, BTC assets will be completely depleted within a few months. The high fees of 1.5 percent are seen as the main reason for the massive capital outflow from the Grayscale ETF. Even if BTC's losses slow down due to the promised reduction in fees, the "flipping" seems only a matter of time.

While the Grayscale product continues to lose ground, BlackRock's competitors are gaining week after week. The gap is melting away and IBIT now holds more than 257,200 Bitcoin, giving it a 30.8 percent market share. Since its approval by the SEC on Jan. 11, BlackRock's Bitcoin ETF has recorded an impressive USD 14.77 billion in net inflows. If IBIT continues to grow at the same pace and GBTC shrinks at the same rate, the ETF flip could take place as early as early May. Thus, all signs point to the flip being imminent.

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