There has been a surge in inflows into nine recently launched exchange-traded funds (ETFs) tied to Bitcoin. This has happened after the cryptocurrency’s price bounce back from its dip last week. Todd Rosenbluth, head of research at VettaFi, an analysis firm, said that this resumption in Bitcoin’s strong performance is sparking renewed interest in the ETFs. According to data from BitMEX Research, the nine funds that made their debut in January pulled in nearly $1 billion in assets in the first two days of this week. The flows data for Wednesday will be available on Thursday morning.
However, the leadership has shifted from BlackRock’s iShares Bitcoin Trust to the Fidelity Wise Origin Bitcoin Fund. The latter attracted $540.9 million in assets in the first two days of this week, which is more than double the $197.7 million BlackRock’s fund drew in the same period, according to BitMEX data. The only fund that continues to buck this trend is the Grayscale Bitcoin Trust. It existed as a publicly traded trust before it converted into an ETF on the same day the other nine ETFs launched. Since then, it has seen steady outflows, regardless of Bitcoin’s price movements. In the first two days of this week, those outflows reached $562.4 million.
David Mercer, CEO of LMAX Group, an institutional cryptocurrency exchange, said that, “At the moment, the numbers are all skewed by Grayscale”. However, he also added that, regardless of how large these flows may be for the ETF market, they’re “a rounding error” when compared to the total market capitalization of Bitcoin itself. Nonetheless, ETF flows seem to be dictating Bitcoin’s price at present. He also noted that the bitcoin price couldn’t rally when you saw outflows in the ETFs.