After 71 days of consistent inflows, BlackRock’s spot Bitcoin exchange-traded fund (ETF), IBIT, appears to have run out of steam, recording zero inflows for the first time.
Launched on Jan. 11, the spot BTC ETF surged to the top of the rankings with consistent inflows from institutional and retail investors. After racking up $15.5 billion in net inflows, the red-hot streak finally hit the rocks with the ETF failing to attract a single dollar over 24 hours for the first time.
IBIT’s slump points to a waning interest in bitcoin ETFs across the ecosystem, underscored by large outflows and lethargy from investors. On the same day that IBIT failed to attract any inflow, Fidelity’s FBTC recorded jarring losses of $22 million, leaving its assets at just under the $10 billion mark.
Grayscale Bitcoin Trust ETF (GBTC) had its fair share of outflows, notching a staggering $130 million in a single day. Out of the top ten, only Franklin Templeton’s EZBC recorded inflows on the same day IBIT failed to attract a single dollar to its offering.
Several theories have been put forward to rationalize the declining interest in ETFs among investors. Right out of the bat, experts believe that the initial ETF frenzy has settled with the broader market cooling off after a massive rally that sent BTC to an all-time high of $73,000.
Nate Geraci, ETF Store President opined that ETF activity generally mirrors the price action of the underlying assets, making a linear movement highly unlikely.
“Large institutions have yet to even allow their brokers to solicit purchases of spot bitcoin ETFs, and registered investment advisors are still slowly wading into the category,” said Geraci. “The bottom line is that flows in any ETF category aren’t going to go up in a straight line – they’ll ebb and flow over time.”
While interest has waned, a bird’s eye view of the spot ETFs paints a rosy picture with the products attracting over an impressive $54 billion since the middle of January. Outside of the US, spot bitcoin ETFs are gathering significant steam in their own right, accentuated by Hong Kong’s latest swathe of approvals.
For now, enthusiasts have their eyes peeled on the decisions of the US Securities and Exchange Commission (SEC) concerning an ether spot ETF. There is speculation that the Commission will reject applications from issuers following its languid stance during meetings, failing to point out any areas of concern.
