Bitcoin ETFs: Funds Get $2 Billion Inflows in Four Days
In just the past four days, Bitcoin ETFs witnessed remarkable growth. | Credit: Spencer Platt/Getty Images
Key Takeaways
- Bitcoin’s recent resurgence is primarily driven by institutional investment in ETFs.
- Bitcoin’s $1T market cap signals growing mainstream acceptance, fueled by major players like BlackRock and Fidelity.
- Despite positive momentum, the broader crypto market faces lingering challenges.
Recently, Bitcoin’s value soared to its highest in more than two years, as it breached significant levels driven by steady investments into newly approved spot exchange-traded funds (ETFs).
This uptick in Bitcoin’s price occurred alongside substantial investments into these spot ETFs, which recorded net inflows exceeding $1 billion in the last week and surpassed $2 billion within just four days.
Bitcoin Surpasses $1 Trillion Market Cap, Doubling Tesla’s Valuation
The cryptocurrency experienced a 4.2% increase , reaching $51,924, marking its first ascent past the $51,000 threshold since December 2021. This surge brought Bitcoin within $18,000 of setting new all-time highs.
Bitcoin’s valuation has soared past the $1 trillion mark, eclipsing Tesla’s market capitalization and positioning itself among the ranks of global technology behemoths.
Among the beneficiaries, BlackRock Inc’s iShares Bitcoin Trust attracted the largest share of weekly inflows, totaling around $690 million.
The cryptocurrency also saw a decrease in outflows from Grayscale Bitcoin Trust following its recent approval by the Securities and Exchange Commission (SEC) to transition into a spot ETF. This transition facilitated the release of approximately $2 billion worth of Bitcoin into the market, initially triggering significant price declines for the digital currency.
Spot Bitcoin ETFs Experience Surge, Four Join Billionaire Club
Recent data from Apollo , a Bitcoin tracking platform, reveals a significant surge in the cryptocurrency market. Over the past four days, the 10 spot Bitcoin ETFs recorded inflows of 43,300 Bitcoins, valued at $2.3 billion at the current market rate.
This influx is notably rapid compared to the previous 20 trading days, during which these funds attracted 42,000 Bitcoins.
Highlighting the sector’s growth, four spot Bitcoin ETFs—excluding Grayscale—have now entered the “billionaire club.” Among these, the Bitwise Bitcoin ETF reached this prestigious milestone on February 14, marking a notable achievement in the cryptocurrency investment landscape.
Outlook on Bitcoin’s Market Dominance and Future Endeavors
Breaking the $1 trillion threshold, Bitcoin has propelled the cumulative crypto market value to $2 trillion, establishing the cryptocurrency sector as the fourth-largest entity in terms of public market valuation.
Data from CoinShares indicates a net positive inflow into the new Bitcoin ETFs, projecting an optimistic future. Traditional financial giants like BlackRock, Fidelity, and Franklin Templeton are exploring further innovations, including proposals for Ethereum ETFs.
Navigating the Future of Bitcoin ETFs
The Assets Under Management (AUM) of the newly launched U.S. spot Bitcoin ETF products have crossed the $10 billion mark, with expectations for continued growth in AUM and net inflows. The BlackRock iShares Bitcoin ETF (IBIT) achieved a noteworthy accomplishment by being the first among recent spot Bitcoin offerings to exceed $2 billion in AUM .
Additionally, Google’s revised advertising policies now permit the promotion of specific cryptocurrency products, including Bitcoin ETFs, on its platforms, potentially enhancing the visibility and adoption of these financial instruments.
Bernstein analysts have pointed out that a “fear of missing out” (FOMO) among retail investors is contributing to interest in Bitcoin, positioning the cryptocurrency on a trajectory towards setting new records, propelled by FOMO-induced purchases.
Bernstein anticipates that investment in the new ETFs will exceed $10 billion in 2024.
Bitcoin Halving Sparks Rally, Lifting Crypto Stocks and Ethereum
Market attention is also keenly focused on the expected Bitcoin halving event this year, projected to occur in April. This event will reduce the creation rate of new Bitcoins by half, an occurrence that has traditionally triggered a surge in the cryptocurrency’s value. The last halving in May 2020 led to a 50% increase in Bitcoin prices in its run-up.
Enthusiasm for a potential approval of a spot Ethereum ETF has also contributed to gains across the broader cryptocurrency market, with Ethereum, the second-largest cryptocurrency, increasing by 2.41% to reach a years’ peak of $2,788.
U.S.-listed cryptocurrency stocks experienced notable gains, with Coinbase Global Inc up byover 14% in positive earning results expectations, Marathon Digital Holdings Inc jumping 14.4%, and MicroStrategy Inc, the largest corporate Bitcoin holder, climbing 12.2%.
Crypto Winter Lingers? Market Struggles Despite Bitcoin Surge
However, the broader cryptocurrency market is grappling with diminished retail interest, a consequence of recent high-profile frauds, bankruptcies, and regulatory actions over the last two years.
This is reflected in the spot trading volumes for Bitcoin , which remain significantly below their peaks in 2021 and 2017. The reduced trading volumes have also contributed to the swift rise of Bitcoin throughout 2023, benefiting from the lack of active sellers in the market.
Currently, the SEC and Coinbase are involved in a legal dispute that could redefine the classification and regulatory framework of cryptocurrency tokens.
Bitcoin Price Rise Forecasted by Bernstein Analysts: ETF Momentum FOMO Propel Crypto Even Higher?
