The main driver of this price increase can be attributed to increased inflows into BTC spot ETFs. As expected last week, outflows for the Grayscale Bitcoin ETF (GBTC) were expected to taper off after a few weeks of trading. These expectations were realized, with GBTC outflows showing a significant decline in the last days of January and continuing to decline through February.
During the first two weeks following approval, GBTC’s daily outflows averaged approximately $500 million. However, last week, GBTC’s total outflow reached approximately $415 million, or a daily average of approximately $83 million. This represents a nearly 85% reduction in outflows compared to the first two weeks of trading.
The striking correlation between declining GBTC outflows and upward price trends is also evident when examining total daily inflows into the BTC spot ETF. A substantial decline in GBTC outflows began on January 26th, with continued inflows into the BTC spot ETF beginning on January 26th to be exact, marking an 11th consecutive day of net inflows.
Moreover, there is a strong correlation between the magnitude of inflows and the decline in GBTC outflows. GBTC’s cumulative outflow last week was $415 million, a significant decrease compared to the previous week, while the BTC spot ETF recorded a total net inflow of about $1.2 billion during the same period, the largest weekly inflow since launch.
Among newly launched BTC ETFs, Blackrock (IBIT) continues to lead with approximately $4.2 billion in assets under management (AUM), followed by Fidelity ETF (FBTC) with approximately $3.5 billion in AUM. Notably, a third ETF surpassed $1 billion in AUM last week, as the BTC ETF offered by Ark & 21Shares (ARKB) currently boasts $1.02 billion in AUM. It is also worth noting that the first daily outflow occurred from a BTC ETF outside of GBTC last week. Notably, the Galaxy & Invesco ETF (BTCO) saw outflows of approximately $17.5 million on Friday.
Trading volume remains very high, with cumulative trading volume last week of approximately $5.5 billion, and daily volume of approximately $1.1 billion. Since its inception, cumulative trading volume has reached $35.6 billion, with average daily trading volume reaching approximately $1.7 billion.