BlackRock Inc.’s Bitcoin fund has posted impressive rolling returns of nearly $18 billion for 71 consecutive days in one of the most significant exchange-traded fund launches in history. However, as the craze surrounding cryptocurrency subsided, investor interest also waned.
Daily inflows into the ETF identified as IBIT fell to virtually zero on Wednesday, according to data compiled by Bloomberg. Throughout April, IBIT recorded net inflows of $1.5 billion.
IBIT’s performance marks a notable shift in cryptocurrency market sentiment, following the excitement generated by the ETF that pushed Bitcoin to an all-time high of about $74,000 last March. Since then, the original cryptocurrency has fallen nearly 15%, and the much-anticipated “halving” event on April 20 failed to provide an immediate boost.
Nonetheless, these new investment vehicles have left a significant mark on the cryptocurrency landscape. In total, they have raised approximately $54 billion, potentially introducing Bitcoin into the portfolios of millions of investors. Hong Kong, which has established itself as a cryptocurrency-friendly jurisdiction, is preparing to list its first Bitcoin and Ethereum ETFs, and other markets are likely to follow suit.
Despite the halt in net inflows, IBIT is quickly closing the gap on current market leader Grayscale Bitcoin Trust. About $130 million flowed out of GBTC on Wednesday alone, bringing total outflows this year to $17 billion, according to Bloomberg data.
GBTC, identified as GBTC, charges a 1.5% management fee, the highest of any fund launched in early January. The launch of ETFs in Hong Kong could lead to increased fee competition putting pressure on GBTC.
Rebecca Sin, ETF analyst at Bloomberg Intelligence, suggested that the launch of a spot Bitcoin ETF in Hong Kong, along with issuers waiving management fees, could lead to further outflows and potentially signal a further change in market dynamics.
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