Bitcoin ETFs Recover with $254 Million Inflow After Three-Day Downturn

Significant Inflows Mark Resurgence of U.S. Bitcoin ETFs

On October 11, 2023, U.S.-based spot Bitcoin Exchange-Traded Funds (ETFs) saw a remarkable turnaround in market activity, recording a substantial $253.6 million in net inflows. This marks a critical rebound after three consecutive days of outflows, representing the third-largest inflow day on record, excluding contributions from BlackRock’s iShares Bitcoin Trust (IBIT).

Leading Contributors to Bitcoin ETF Inflows

The Fidelity Wise Origin Bitcoin Fund spearheaded this wave of positive inflows, attracting $117.1 million. Following closely were the ARK 21Shares Bitcoin ETF, securing $97.6 million, and the Bitwise Bitcoin ETF, which celebrated its largest inflow in the last 11 trading days with $38.8 million. Two other ETFs, Invesco Galaxy and VanEck Bitcoin ETFs, also saw considerable inflows during the same period.

Market Dynamics and Price Movements

Despite BlackRock’s IBIT and other notable funds, such as those from Franklin Templeton, Valkyrie, and WisdomTree, each registering zero flows on the day, the overall inflow significantly overshadowed a previous $140 million outflow recorded between October 8 and 10. This increase in investments coincided with a notable Bitcoin price rally of 7.3%, which pushed the cryptocurrency’s price to $63,360 before it settled around $62,530, according to data from CoinGecko.

BlackRock's Continued Dominance in the ETF Market

BlackRock continues to dominate the spot Bitcoin ETF landscape, currently leading with a remarkable total of $21.7 billion in net inflows. Fidelity is right behind, inches from crossing the $10 billion threshold with just $15 million remaining. Meanwhile, ARK 21Shares and Bitwise are the only other players in the Bitcoin ETF arena boasting net inflows above $2 billion, bringing the total accumulated inflows for spot Bitcoin ETFs to $18.9 billion.

Challenges Faced by Ethereum ETFs

While Bitcoin ETFs are experiencing a resurgence, the narrative for Ethereum ETFs appears starkly different. On October 11, seven out of nine U.S.-based spot Ethereum ETFs reported zero inflows. This marks the third instance in the past five trading days where such a trend has occurred. Overall, the Ether ETFs faced a minor net outflow of $0.1 million, with the only inflows stemming from Fidelity’s Ethereum Fund. In contrast, the Grayscale Ethereum Trust suffered an outflow amounting to $8.7 million.

Conclusion

The contrasting fortunes of Bitcoin and Ethereum ETFs highlight the volatile nature of the cryptocurrency market. While Bitcoin continues to attract significant investments and showcases a resilient upward trend, Ethereum ETFs are grappling with stagnation and outflows. Investors closely monitoring this space will need to assess the long-term implications of these trends.