Since their inception, exchange-traded funds (ETFs) for spot Bitcoin (BTC) have seen a significant rise in popularity, accumulating total inflows surpassing $22 billion.
Among the leaders, IBIT by BlackRock has stood out with an impressive $23 billion in inflows, while GBTC by Grayscale has experienced significant outflows totaling $20 billion.
The recent momentum in BTC ETFs has continued with nearly $1 billion in net inflows recorded last week, marking the highest demand observed in the past six months.
Insights from Industry Leaders
In light of the remarkable success of spot Bitcoin ETFs, Nate Geraci, who serves as the President of ETF Store, shared his perspectives, stating,
Contributing to the discussion, Charles Edwards, the Founder of Capriole Investments and The Ref, commented,
Are Retail Investors Leading the Bitcoin ETF Market?
Despite spot BTC ETFs opening doors for institutional investors, recent data from crypto exchange Binance suggests that retail investors are playing a major role in driving the increasing demand.
Binance’s report indicates that retail investors currently hold a significant 80% of the total assets in these ETFs, emphasizing their crucial contribution to the market’s upward trend.
This trend showcases a notable shift in investment patterns, where individual investors are not only actively participating but are also sparking substantial interest in Bitcoin through these financial tools.
The report highlighted,
“Spot Bitcoin (“BTC”) Exchange-traded funds (“ETFs”) have accumulated over 938.7K BTC (~US$63.3B), and when including other similar funds, this figure comprises 5.2% of Bitcoin’s total supply.”
Further Insights
The report also pointed out a significant increase in activity within crypto ETFs, with net inflows exceeding 312,500 BTC (approximately $18.9 billion) and positive inflows recorded in 24 out of the last 40 weeks. On average, these ETFs are withdrawing about 1,100 BTC daily from circulation, reflecting an active buying strategy.
This decrease in available supply, along with growing demand, has the potential to drive Bitcoin prices higher, indicating a rising acceptance of Bitcoin investments through ETFs and a considerable shift in market dynamics.
Bitcoin ETFs compared to Gold and Ethereum ETFs
On the other hand, the report showcases that spot BTC ETFs have significantly outperformed initial Gold ETFs, recording net inflows of around $18.9 billion within a year, compared to just $1.5 billion for Gold ETFs. This surge has attracted over 1,200 institutional investors to Bitcoin ETFs, a remarkable increase from the 95 institutions in Gold’s first year.
In contrast, Ethereum (ETH) ETFs have faced challenges, witnessing outflows of about 43,700 ETH (approximately $103.1 million) and negative flows in eight of the last eleven weeks.
Therefore, when adjusted for spot trading volume, Bitcoin ETFs have a more substantial impact on market dynamics, signaling stronger demand from institutions.
These trends align with Bitcoin’s price rise to $68,266.17, following a 1.87% increase in the last 24 hours and a 4.38% gain over the month, as per CoinMarketCap data.