Bitcoin records 9 days in a row of money inflows through ETFs

Spot bitcoin (BTC) ETFs have regained their winning ways, after several “weak” weeks in terms of capital inflows.

In total, funds based on the first digital currency recorded $1.75 billion in revenue over the past nine days.

This is Longest streak of inflows to ETFs since mid-March. Yesterday, May 24, they raised 107 million dollars. This can be seen in the graph below from the SoSoValue tracker.

Inflows were led by the ETF managed by the BlackRock company, iShares Bitcoin Trust (IBIT), with $89 million. This is one of the financial products that has performed the best since they were launched in January.

It is followed by the company Fidelity with its Fidelity Wise Origin Bitcoin Fund (FBTC) with 19 million dollars. VanEck’s bitcoin fund, VanEck Bitcoin Trust (HODL), reported net inflows of $10 million.

Those that registered the least money flow were the funds of the companies Ark Invest, 21Shares Bitcoin ETF (ARKB) and Invesco and Galaxy Digital, Invesco Galaxy Bitcoin ETF (BTCO) with net receipts of 2 million dollarsrespectively.

The WisdomTree Bitcoin Fund (BTCW), Franklin Bitcoin ETF (EZBC), Valkyrie Bitcoin Fund (BRRR), Bitwise Bitcoin ETF (BITB), and Hashdex (DEFI) had no inflows or outflows; indicating a neutral market for these products.

Instead, the only one with capital outflows was the managed fund of the company GrayscaleGrayscale Bitcoin Trust (GBTC) with 14 million dollars.

If this trend persists, it will be bullish for the price of bitcoin due to the operation of spot ETFs, which are backed by the underlying asset. Cash fund management companies They must buy and hold bitcoin in their treasuries to support their actions.

This process of purchasing bitcoin to back spot ETFs creates direct and tangible demand in the market. As more investors move capital into these funds, the companies that manage the ETFs must acquire more bitcoin to maintain adequate support. This, in turn, reduces the amount of bitcoin available on the open market, which can lead to an increase in price due to limited supply.

Possible competition has come to bitcoin ETFs

Without a doubt, bitcoin ETFs have been well received by the markets since their launch in January. Until yesterday, funds recorded total net inflows of $13.43 billion.

With the approval of spot ETFs for ether (ETH), Ethereum’s cryptocurrency, yesterday in the United States, the possibility arises that these products Bitcoin peers could take ground. These new ETFs will probably start trading in mid-June.

For Eric Balchunas, a specialist in the area of ​​exchange-traded funds, the outlook does not look so favorable. According to his comments, Ethereum ETFs will get just 10% to 15% of assets held by bitcoin ETFs today.

The specialist also establishes another challenge that new financial products could have. Is about How are they going to penetrate the world of the so-called “boomer” generation?. These are people who are between 50 and 75 years old. He mentions this because there are a considerable number of investors who belong to that demographic group.

Balchunas considers that, In the case of bitcoin, it is easy to understand for those investors, since digital currency is often compared to gold, that is why they call it digital gold. So the question is, is there a simple phrase like that for ether?

For its part, with a better expectation, the British bank, Standard Chartered, estimates that ether funds could generate inflows in their first 12 months of between 15,000 million and 45,000 million dollars, as reported by CriptoNoticias.

Regarding the price of the cryptocurrency, the bank projects that it will be $8,000 at the end of 2024. After the approval of the ETFs, it rose to $3,900, but then fell and currently remains at $3,700 as it does for four days.