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Bitcoin ETFs: Rise, fall, and the unseen factors shaping the future

bitcoin ETFs

Investor interest in the eagerly awaited spot Bitcoin ETFs seems to be losing steam, as evidenced by Wednesday's (07.02.2024) notable decline in gross inflows since trading commenced on January 11.

On that particular day, the nine recently introduced funds managed to attract approximately $270 million in inflows, according to a report from JPMorgan Chase & Co. However, when factoring in the outflows from Grayscale Investment's spot Bitcoin ETF, the overall net outflows amounted to around $153 million on Wednesday.

Remarkably, this marks the third consecutive day of net outflows for the group of ten funds, with the outflows exclusively stemming from GBTC. It's worth noting that GBTC transitioned from a trust following the US Securities and Exchange Commission's approval of the investment vehicle.

JPMorgan labeled the group's flow performance as "disappointing," citing it as a factor behind their decision to downgrade cryptocurrency exchange Coinbase Global Inc. earlier in the week, as outlined in an analyst report on Thursday.

Since their debut, the nine new ETFs have witnessed significant inflows, accumulating a total of $5.2 billion. This has partially offset the $4.4 billion in outflows from GBTC.

However, recent days have witnessed a shift in this balance. While daily net outflows from GBTC are gradually decreasing, the total inflows in the other nine ETFs are diminishing at an even faster rate. The current total net inflows stand at $857 million as reported by Bloomberg.

Despite the apparent deceleration in demand, the group of spot Bitcoin ETFs managed to achieve the most successful ETF launch in history, according to assessments of both trading and flow metrics by Bloomberg Intelligence analysts.

Their debut has been marked by historical significance and noteworthy achievements in the realm of exchange-traded funds.



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