On Tuesday, May 21, BlackRock’s spot Bitcoin exchange-traded fund (ETF), the iShares Bitcoin Trust (IBIT), captured 95% of the total inflows into United States spot Bitcoin ETFs, highlighting a significant shift in investment dynamics. These inflows amounted to a staggering $290 million out of a total of $305.7 million recorded for all ETF issuers combined on that day. This marked the highest single-day inflow for BlackRock’s ETF since April 5, ending a period of six weeks with minimal or zero inflows.
Context of the Surge in Inflows
The substantial inflow into BlackRock’s ETF coincides with a broader increase in market activity, with over $1 billion returning to spot Bitcoin ETFs in just the past four trading days. This resurgence aligns with a choppy yet bullish trend in Bitcoin’s market performance.
While BlackRock’s IBIT has seen a remarkable influx, bringing its total inflows since launch to $16 billion according to Farside Investors, the fund officially reports assets under management (AUM) of $19 billion. This positions IBIT close to the industry leader, Grayscale’s Bitcoin Trust (GBTC), which holds $20 billion in AUM.
On the same day, the GBTC experienced no outflows and has not seen a net outflow for five consecutive trading days, accumulating $72.5 million in inflows over that period. This recent activity represents a reversal from a four-month trend of consistent outflows.
Outflows in Other ETFs
Not all funds shared in the positive trends. The VanEck Bitcoin Trust ETF and the Bitwise Bitcoin ETF recorded outflows of $5.9 million and $4.2 million, respectively. Meanwhile, the Fidelity Wise Origin Bitcoin Fund saw a moderate increase, with inflows of $25.8 million.
The enthusiasm around Bitcoin ETFs has been partly fueled by a significant uptick in BTC prices. Over the past week, Bitcoin has seen a 12% increase in value, reaching a six-week high of $71,600 on May 21. However, it slightly retreated below the $70,000 mark during early Asian trading on May 22, trading at approximately $69,444 at the time of reporting.
Influence of Regulatory Developments
The crypto market’s buoyancy is also being supported by optimistic speculation that the U.S. Securities and Exchange Commission (SEC) might approve spot Ether ETFs in the U.S. soon, an expectation that has positively influenced market sentiments since May 20.
BlackRock’s iShares Bitcoin Trust’s performance on May 21 highlights its pivotal role in the growing acceptance and investment in cryptocurrency through traditional financial mechanisms like ETFs. As the market continues to evolve, the actions of regulatory bodies like the SEC will play a critical role in shaping the landscape and confidence in cryptocurrency investments.
Featured image credit: Angela Antetomaso via Global Finance