This week saw a notable shift in momentum for the launch of two of the most successful exchange traded funds in history. IBIT, BlackRock’s (NYSE:BLK) spot Bitcoin ETF known for its impressive performance, saw zero inflows on Wednesday and Thursday, ending a 71-day streak of new investments totaling approximately $17.24 billion in assets under management since the deal was approved. . Additionally, Fidelity’s FBTC, currently ranked second in the ETF race, reported a loss of $22.6 million on Thursday, its first reported outflow and reducing its assets under management to about $9.9 billion, according to CoinGlass data.
The decline in interest in major Bitcoin ETFs, excluding Grayscale’s GBTC, serves as a significant indicator of the recent cooling in the cryptocurrency market and suggests that the initial ETF craze that catapulted Bitcoin to new heights has subsided. . Bitcoin is currently trading at $63,500, down about 12% from its all-time high of $73,000 in March, and of the 10 trading spot Bitcoin ETFs, only Franklin Templeton’s EZBC reported inflows on Thursday.
Disappointing inflation data has dampened hopes of a rate cut from the Federal Reserve, and the prospect of higher borrowing costs generally reduces the market’s appetite for riskier, more volatile investments such as cryptocurrencies. Meanwhile, Bitcoin has remained relatively stagnant since early March, as investors adhere to a “buy on the rumor, sell on the news” strategy, liquidating their holdings, leading to ETF stagnation and the network’s recent April 19 ” This partially reflects the anticipation surrounding the “Half-Life” event.
Nate Geraci, president of ETF Store, pointed out that ETF flows often reflect the performance of the underlying assets, suggesting that a pause in the price of Bitcoin could temporarily halt inflows. However, Geraci emphasized that these products are still in the early stages of adoption, with many large institutions not yet allowing brokers to recommend purchases of spot Bitcoin ETFs and registered investment advisors entering the category cautiously.
Despite the recent economic slowdown, the fund is widely considered to be a huge success, amassing more than $54 billion in assets in just three months of trading, helping to integrate Bitcoin-tracking assets into the portfolios of millions of mainstream investors.
Highlighting their success, Hong Kong’s Securities and Futures Commission recently granted approval for three spot Bitcoin and Ether ETFs scheduled to begin trading on Tuesday, with additional countries expected to follow suit. Issuer Harvest has waived management fees for its funds, sparking expectations of a fee war similar to the heated competition in the United States. Grayscale introduced Bitcoin Mini Trust with an ultra-low fee of 0.15% to capture some of the outflow. GBTC charges a 1.5% fee.
Featured Image: Freepik
Please see disclaimer