Record Inflows in Spot Bitcoin ETFs Amidst Investor Demand Shift

Bitcoin ETFs Surge Amid Crypto Market Shift

On February 9, 2024, spot Bitcoin exchange-traded funds (ETFs) experienced a significant influx, recording their third-largest inflow day with $403 million ($8,698 in BTC), according to recent reports from CoinTelegraph. Since their launch on January 11, 2024, spot BTC ETFs have seen a massive daily trading volume surpassing $1 billion, demonstrating a strong and increasing demand for Bitcoin among investors.

According to data from CoinDesk, Bitcoin underwent a 15% drop to around $41,300 since its first U.S. spot BTC ETF listing, led by a $1.5 billion outflow from Grayscale Bitcoin Trust (GBTC). BlackRock iShares Bitcoin Trust (IBIT) emerged as the first ETF to exceed GBTC's daily trading volume, highlighting a notable shift in investor preference.

Key Players in the Bitcoin ETF Industry

  • BlackRock iShares Bitcoin Trust (IBIT) leads the ETF flow chart, recording $204 million in inflows.
  • Fidelity saw $128 million in inflows.
  • ARK 21Shares had $86 million in inflows.
  • Bitwise had $60 million.
  • Other seven ETFs combined saw $27 million in inflows, while GBTC saw an outflow of $102 million.

Bitcoin ETFs offer retail and institutional investors exposure to cryptocurrencies without requiring the ownership of physical digital coins. Several major players, including BlackRock, Fidelity, ARK, and Bitwise, have based their investment activities on these ETFs.

CoinDesk's January 19 report also emphasizes Grayscale's $1.5 billion outflow from GBTC, indicating that investors are increasingly shifting their preference towards ETFs due to lower fees and greater liquidity. Coinbase may provide updates regarding the impact of US Bitcoin ETFs on the BTC spot trading volume.

At the end, here are the essential references:

Notably, several Bitcoin ETFs are available with varying fees, promotions, and holding structures, as per NerdWallet's ETF comparison. BlackRock has been actively lowering their fees to compete with other providers such as Bitwise in this nascent and fast-growing market: https://www.nerdwallet.com/article/investing/spot-bitcoin-etf

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