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Bitcoin ETF Inflow Records Point Towards More Upside for BTC Price

Published March 6, 2024 12:32 PM
Shraddha Sharma
Published March 6, 2024 12:32 PM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • Record-breaking $648 million in net inflows to Bitcoin ETFs signals growing investor confidence.
  • The majority of ETFs experienced inflows, with BlackRock leading with a record $788.3 million in a single day.
  • Despite a drop in the Bitcoin price, increased institutional access and investor interest suggest bullish trends.

Bitcoin exchange-traded funds (ETFs) have seen record inflows, pointing towards a brighter future for Bitcoin’s price. The BTC price reached an all-time high before tumbling down due to profit-taking. But, with 10 Bitcoin ETFs collectively reaching a $10 billion trading volume, surpassing previous benchmarks is a positive.

Record-Breaking Bitcoin ETF Inflows

The 10 Bitcoin ETFs, including notable names such as $IBIT, $FBTC, $BITB, and $ARKB, achieved a collective trading volume of $10 billion on March 5. Bloomberg analyst Eric Balchunas called it a significant milestone during their relatively short existence of under two months.

Despite the relative price weakness in BTC, the inflows are indicative of a continued interest in crypto through traditional financial vehicles.

March 5 marked net inflows worth $648m, the highest since the ETFs’ January inception. BlackRock emerged as the frontrunner, recording an $788.3m inflow. Fidelity garnered $125.6m while Ark Invest received $63.7 million.

The influx of capital suggests demand for Bitcoin exposure, with Grayscale and Invesco being the only two issuers witnessing outflows.

Grayscale Bitcoin Trust and Invesco Galaxy Bitcoin ETF recorded net outflows of $332.5 million and $14.2 million, respectively.

Institutional Adoption and Investor Sentiment

Despite some ETFs experiencing outflows, the overwhelming trend leans towards accumulation, signifying a bullish outlook among investors. The market will remain positive as news of major financial institutions like Morgan Stanley, Wells Fargo and Bank of America making way to offer Bitcoin ETF access to their clients. Such developments underscore the growing mainstream acceptance of Bitcoin as a legitimate investment class.

However, critics like economist Peter Schiff highlighted the volatility in Bitcoin ETF values, comparing  it against gold’s consistent performance in percentage terms.

However, the broader market indicators, including decreased exchange reserves and a surge in Coinbase’s premium, suggest a strong institutional interest. Therefore, there is a potential for further price appreciation despite an almost 10% immediate fall from the peak.

BTC Exchange Reserves and Sentiments | Source:CryptoQuant
BTC Exchange Reserves and Sentiment | Source:CryptoQuant

Parth Chaturvedi, the lead of investments at CoinSwitch Ventures, told CCN that the large involvement of institutions through spot BTC ETFs, along with investors’ expectations surrounding the upcoming BTC halving, are the primary factors propelling Bitcoin price.

Chaturvedi said, “BTC has grown over 50% over the past month and over 150% in the last six months. With market capitalization of over $1.3T, BTC is larger than nearly all publicly traded companies while also closing in on silver as a commodity. With the halving still underway, we may get to see BTC prices go even higher and hit new ATHs [all-time highs] before retracing and continuing its rise.”

Bitcoin Holders Optimistic

The recent record-breaking inflows into Bitcoin ETFs reflect growing investor confidence and institutional acceptance of cryptocurrencies. While BTC’s volatility persist for now, the influx of capital, coupled with increasing access to Bitcoin through traditional financial platforms, suggests a bullish future for the Bitcoin price.

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