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After a depressing few weeks of outflows, the tide may be turning for Bitcoin exchange-traded funds (ETFs): On Friday, every single one of the relatively young investment products saw their cash flow turn positive for the first time ever.
Data from Farside Investors shows that the unanimous turnaround was due to investors plugging more cash into Grayscale’s Bitcoin Trust (GBTC) than was pulled out of it since it became an ETF in January.
The fund had experienced outflows every day as investors who couldn’t previously redeem shares did so, often in search of competitive funds with lower fees.
First time ever 1D flows all green, no red for the Bitcoin Bunch. Not going to spike the football like some did during the outflow period but will point out that over 95% of the ETF investors HOLD-ed during what was a pretty nasty and persistent downturn. Will same happen next… pic.twitter.com/3l3uwwmqGy
— Eric Balchunas (@EricBalchunas) May 6, 2024
But on Friday, GBTC grew by $63 million. This, combined with investors plugging cash into all of the other crypto funds, meant that a total of $378 million entered the collective Bitcoin ETF market that day.
It represents a remarkable turnaround, as the investment vehicles had their worst day on record earlier last week when they bled over half a billion dollars. And that came after weeks of waning interest from investors in the products.
The Securities and Exchange Commission in January approved 11 spot Bitcoin ETFs after a decade of applications. The funds allow ordinary investors to buy shares that track the price of the cryptocurrency via brokerage accounts.
They were immediately and massively popular, with billions of dollars entering the funds. The explosion in ETF popularity is credited with driving up the price of Bitcoin, which in March touched a new all-time high of $73,747, according to CoinGecko.
But the initial hype slowed down last month. Added to that, the Federal Reserve hinted that it was in no hurry to cut interest rates, and turbulence in the Middle East scared investors away from so-called “risk-on” assets like Bitcoin.
Investors pulling money out of the funds puts downward pressure on the price of Bitcoin, which is now trading not only below its March all-time high but also under the 2021 record of $69,044.
Friday brought a welcome reprieve. Could a sustained optimistic shift in investor sentiment push the coin’s price back up again?
Edited by Ryan Ozawa.
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Source: https://decrypt.co/229553/bitcoin-spot-etf-inflows-across-the-board-gbtc-turns-green
