Record $1.05b inflow propels Bitcoin ETFs ahead of mining supplies in acquisition spree
Bitcoin spot Exchange-Traded Funds (ETFs) experienced a historic surge in net inflow on March 12, with a total of $1.05 billion pouring in. This marked the highest single-day net inflow since the ETF’s inception, representing a significant increase of approximately 56% compared to the $673 million recorded on Feb. 28. The remarkable inflow into Bitcoin ETFs can be attributed, in part, to their consistent performance, which has outpaced the rate at which new Bitcoins are being mined.
Clive Thompson, a former managing director of wealth management with a background in Swiss Private Banking, highlighted the impressive acquisitions made by the new Bitcoin ETFs on March 11. They acquired approximately 7200 Bitcoins, a figure that sharply contrasts with the average daily mined supply of 900 Bitcoins. Thompson emphasized that this demand-supply imbalance resulted in a 5% increase in Bitcoin prices.
Thompson also drew attention to the role of Genesis Holdings in the market dynamics. Following its bankruptcy, Genesis Holdings began liquidating its GBTC shares, which indirectly affected Bitcoin sales. These sales, which started on Feb. 28, seemed to conclude around March 13. Thompson speculated that the completion of Genesis’s GBTC share sales could have significant implications for the future price trajectory of Bitcoin. He anticipated a potential surge to new highs, which would likely lead to more inflows into Bitcoin ETFs.
Crypto.news reached out to Clive Thompson for further insights on the matter.
In addition, Eric Balchunas, a senior ETF analyst, provided insights on the remarkable trading volumes observed in the Bitcoin ETF market. On March 12, Balchunas noted that the market experienced its second-highest trading volume day for the ten spot Bitcoin ETFs, making it the best day in the past five weeks with a total volume of $8.5 billion.
The trading volume surpassed that of all but five individual stocks. BlackRock’s spot Bitcoin ETF, IBIT, particularly stood out with an extraordinary level of activity, doubling the trading volume of SPDR Gold Shares ETF (GLD). Furthermore, other ETFs like VanEck’s HODL and Invesco Galaxy’s BTCO also witnessed substantial trading volumes of $150 million and $250 million, respectively, which were significant achievements for these funds.
The success of IBIT has generated increased interest in Bitcoin ETFs, prompting BlackRock, under the leadership of Larry Fink, to seek regulatory approval for expanding its cryptocurrency offerings. This includes proposals for additional spot Bitcoin ETFs and their inclusion in BlackRock’s Global Allocation Fund. BlackRock is also aiming to extend its presence to emerging markets in Latin America through the launch of the iShares Bitcoin Trust ETF’s Depositary Receipts in Brazil.
However, the path to approving new cryptocurrency ETFs, including those for Ethereum (ETH), faces regulatory challenges. The Securities and Exchange Commission (SEC) has delayed its decision on these filings until May, sparking speculation among experts regarding the likelihood of approval.
The lack of communication between the SEC and ETF issuers like BlackRock has been identified as a significant factor contributing to the uncertainty. Nevertheless, there is anticipation for upcoming meetings that could potentially influence the SEC’s stance on these innovative financial products.
Read more: Bitcoin reaches a new all-time high at $73k
