Bitcoin ETF Market Attracts $378 Million in Single Day After Weeks of Outflows

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• TLD|R

The tide may be turning for Bitcoin exchange-traded funds (ETFs) after a challenging few weeks marked by outflows and waning investor interest. On Friday, every single Bitcoin ETF experienced positive cash flow for the first time ever, signaling a potential shift in sentiment among traditional investors.

TLD|R

• Bitcoin exchange-traded funds (ETFs) saw a turnaround on Friday, with every fund experiencing positive cash flow for the first time ever.
• The unanimous turnaround was due to investors plugging more cash into Grayscale’s Bitcoin Trust (GBTC) than was pulled out of it since it became an ETF in January.
• GBTC grew by $63 million on Friday, and a total of $378 million entered the collective Bitcoin ETF market that day.
• The inflows marked a significant change from the previous weeks, which saw waning interest and record outflows, including the worst day on record with over half a billion dollars in net outflows.
• Despite GBTC’s cumulative net outflow of $17.4 billion, overall spot Bitcoin ETFs in the U.S. maintain a positive balance sheet, with BlackRock’s iShares Bitcoin Trust attracting the largest overall investment of $15.5 billion.

Data from Farside Investors reveals that the unanimous turnaround was primarily driven by investors plugging more cash into Grayscale’s Bitcoin Trust (GBTC) than was withdrawn since its conversion to an ETF in January.

GBTC had been experiencing daily outflows as investors who couldn’t previously redeem shares did so, often seeking out competitive funds with lower fees.

However, on Friday, GBTC saw an impressive $63 million in growth. Combined with inflows into all other crypto funds, the collective Bitcoin ETF market witnessed a total of $378 million in new investments that day.

This remarkable turnaround comes on the heels of the worst day on record for Bitcoin ETFs, which saw over half a billion dollars in net outflows earlier last week, following weeks of declining investor interest.

The U.S. Securities and Exchange Commission approved 11 spot Bitcoin ETFs in January after a decade of applications.

These funds allow ordinary investors to buy shares that track the price of the cryptocurrency through brokerage accounts.

The ETFs were an instant hit, attracting billions of dollars in investments and contributing to Bitcoin’s price surge, which culminated in a new all-time high of $73,747 in March, according to CoinGecko.

Despite the initial hype, investor enthusiasm cooled off last month. Coupled with the Federal Reserve’s hints that it was not in a hurry to cut interest rates and geopolitical turbulence in the Middle East, investors began pulling money out of the funds, putting downward pressure on the price of Bitcoin.

As a result, the cryptocurrency is now trading below its March all-time high and the previous record of $69,044 set in 2021.

Friday’s positive inflows brought a welcome reprieve to the Bitcoin ETF market. Grayscale, which manages billions of dollars worth of cryptocurrencies, saw its GBTC fund snap an 11-week losing streak with a positive gain of $63 million.

Bloomberg ETF analyst Eric Balchunas expressed his surprise on Twitter, stating, “Holy crap $GBTC had inflows today. Their 80 day-ish streak is finally over. I had to run my eyes and double check the numbers.”

First time ever 1D flows all green, no red for the Bitcoin Bunch. Not going to spike the football like some did during the outflow period but will point out that over 95% of the ETF investors HOLD-ed during what was a pretty nasty and persistent downturn. Will same happen next… pic.twitter.com/3l3uwwmqGy

— Eric Balchunas (@EricBalchunas) May 6, 2024

The positive momentum continued into Monday, with GBTC recording its second consecutive day of net inflows, drawing in an additional $4 million.

The 11 U.S.-based spot Bitcoin ETFs added a total of $217.06 million on Monday, with Fidelity’s FBTC leading the net inflows at $99 million, followed by Ark Invest’s bitcoin fund with $76 million.

Despite GBTC’s cumulative net outflow of $17.4 billion since its conversion to an ETF, the overall spot Bitcoin ETF market in the U.S. maintains a positive balance sheet.

BlackRock’s iShares Bitcoin Trust has attracted the largest overall investment, with net inflows of $15.5 billion. Other major contributors include Fidelity Investments’ Fidelity Wise Origin Bitcoin Fund ($8.1 billion), Cathie Wood’s ARK 21Shares Bitcoin ETF ($2.1 billion), and the Bitwise Bitcoin ETF Trust ($1.7 billion).

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