Bitcoin Exchange-Traded Funds Emerge as Top Investment Preference, Analysts Suggest
Bitcoin’s recent performance in the market has been truly remarkable. The cryptocurrency continues to draw attention by surpassing key price levels and achieving milestones in the realm of exchange-traded funds (ETFs).
Recently, Bitcoin surged above the crucial $68,000 mark, approaching the significant $70,000 valuation. Despite a slight dip to $67,442 at the time of writing, the monthly gains remained strong at 6.86%.
Currently standing approximately 3.65% away from reaching $70,000, the record inflows in Bitcoin ETFs could potentially propel it to this next target.
Recent data from SoSo Value indicates that on October 21st, total net inflows reached $294.29 million, contributing to a cumulative sum of $21.23 billion. Additionally, total net assets amounted to $65.34 billion, representing 4.88% of the cryptocurrency’s total market capitalization.
BlackRock’s IBIT Leads in the Bitcoin ETF Market Scene
Notably, a key player in driving these inflows is BlackRock’s iShares Bitcoin Trust (IBIT). Despite the price decrease, IBIT witnessed inflows of $329 million on October 21st.
Furthermore, IBIT outpaced all spot Bitcoin ETF products, amassing over $23 billion in total net inflows.
Eric Balchunas, a senior analyst in ETFs at Bloomberg, highlighted the outstanding performance of IBIT, citing that the ETF attracted $1.1 billion in new investments. It even surpassed Vanguard’s VTI in year-to-date flows.
What makes this accomplishment particularly noteworthy, as per Balchunas, is that IBIT is a relatively recent launch, competing with ETFs that have been established for more than two decades and manage billions of dollars. Currently, BlackRock’s IBIT boasts $26 billion in assets under management, placing it in the top 2% of all ETFs globally.
Bitcoin ETFs versus Gold ETFs
The substantial inflows seen in Bitcoin ETFs prompt discussions on whether investors are shifting focus from traditional safe-haven assets, such as gold.
Balchunas shared insights on the evolving competition between Bitcoin and gold. In an interview with Bloomberg Surveillance, he noted,
“Bitcoin and the introduced ETFs may have redirected the attention that would have traditionally flowed into gold this year.”
The analyst suggested that gold could have experienced inflows of up to $10 billion if it weren’t for the rise of Bitcoin ETFs. This shift is largely influenced by Bitcoin’s growing popularity and its emerging role as a competitor to gold in the asset landscape.
Institutional Appetite Grows While Retail Interest Declines
The traction gained by BTC ETFs underscores the increasing institutional interest in the cryptocurrency domain while retail participation has waned. Recent data from Google Trends reveals a decline in searches for “Bitcoin” and “Bitcoin ETF.”
Interest in “Bitcoin ETF” has remained subdued since the rollout of spot ETFs in January 2024, with a score of just 2 registered last week.
Similarly, searches for “Bitcoin” have significantly dropped since March, recording a score of 33 last week. This notable disparity signifies a shift in market dynamics.