Bitcoin ETFs Hit A Record $1.4 Billion In Net Inflows In Just Two Trading Sessions

After a whole decade of waiting, the US Securities and Exchange Commission (SEC) approved the trading of spot Bitcoin ETFs on Wednesday, January 10, marking a pivotal moment in the history of the stock market. 

Bitcoin Spot ETFs A Major Hit, Recording $3.6 Billion In Trading Volume On Debut Week

The newly launched exchange-traded funds have been a smashing hit, with over $1.4 billion in net inflows recorded across the first two trading sessions, indicating just how much demand institutional investors have for Bitcoin (BTC).

According to data compiled by Bloomberg senior ETF analyst Eric Balchunas, a total of 500,000 shares, worth $3.6 billion, were made on the fund. 

Since trading volume considers both outflow and inflow figures from the fund, Balchunas suggested the numbers may be adjusted due to transactions awaiting accounting settlement. 

In his X post, Balchunas explained that Wall Street investment giant BlackRock’s iShares Bitcoin Trust ETF (IBIT) led the chart with an estimated inflow of $497.7 million that was followed closely by Fidelity’s FBTC, which amassed about $422.3 million. 

The Bitcoin spot ETFs from Bitwise (BITB) and ARK 21Shares (ARKB) also enjoyed significant performances over the week, attracting $237.9 million and $105.2 million, respectively. 

GBTC Suffers $579 Million In Outflows As Investors Rotate To Cheaper Funds Tracking BTC

Bloomberg’s data also revealed that digital asset manager Grayscale’s ETF, the Grayscale Bitcoin Trust (GBTC), experienced record-breaking outflows of $579 million during the period. 

The company had received permission from the SEC to convert GBTC from a futures-traded product into a spot-traded fund. As soon as the Bitcoin ETF was listed on the New York Stock Exchange (NYSE) and redemptions were opened, investors rushed to cash out their GBTC shares to switch to low-fee options like IBIT and FBTC. 

Anthony Scaramucci, the founder of SkyBridge Capital, pointed out this trend as one of the reasons why Bitcoin had dipped even after successful ETF trading sessions over the past week. 

Grayscale is said to be the largest corporate holder of Bitcoin (BTC). As per data from the blockchain analytics platform Arkham Intelligence, the digital asset manager holds over $26 billion worth of the cryptocurrency. 

GBTC shares have been trading in the market since 2013 but were not redeemable until January 11 when the SEC approved it as a spot ETF through a rule change. Minusing GBTC’s outflows, the net inflows across all 11 spot Bitcoin ETFs stood at an impressive $818.9 million in its debut trading week. 

Experts predict these figures to rise over the next few weeks as selling volume starts to decline. Additionally, investors are anticipating the debut of Hashdex’s spot Bitcoin ETF – DEFI, which is currently undergoing an SEC-approved conversion from a Bitcoin futures ETF to a spot market-traded Bitcoin ETF. 

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Bitcoin Declines 7% Despite Successful ETF Debut, Confirming Rumors of Sell-The-News Event

The world’s most valuable cryptocurrency rallied 75% in the 90 days leading up to the ETF approvals but suffered a nearly 7% decline between January 11 and 12, the first two days of trading for the funds. 

BTC’s price decline only confirmed speculations by experts that a sell-the-news type of event would follow the SEC’s approval of Bitcoin ETFs. 

However, there is optimism in the market for Bitcoin-focused funds with ETF analyst James Seyffart saying he believes the BTC spot ETFs could attract around $10 billion in their first year. 

At the time of writing, Bitcoin (BTC) is trading at $42,647 – down 0.3% in the last 24 hours.

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