Excitement was high about one month ago, when TradFi finally got the regulatory go-ahead to launch an entirely new investment vehicle for crypto.
The process of bringing to the U.S. market a spot bitcoin ETF took more than a decade, but on Jan. 11, 10 such products finally began trading.
It’s been a hell of a ride since.
“These ETFs have done very, very well,” said Brian D. Evans, CEO and founder of BDE Ventures. “We’re seeing big inflows now, and the euphoria phase is certainly kicking in now.”
The new ETFs have added on average a net $125 million worth of bitcoin {{BTC}} each day over the past four weeks. This is despite heavy outflows – more than $6 billion in total – out of the Grayscale Bitcoin Trust (GBTC), which has far higher fees than the other bitcoin ETFs.
In just a month, the bitcoin funds ex-GBTC have accumulated over $11 billion worth of bitcoin, with three of the ETFs – BlackRock’s IBIT, Fidelity’s FBTC and Ark 21’s ARKB – topping the $1 billion mark in assets under management. In fact, as of the end of Monday, IBIT was nearing $5 billion in AUM and FBTC was just shy of $4 billion.
BlackRock’s fund has even made it in the top five of all (including non-crypto) ETFs based on 2024 inflows, putting it on similar levels with industry-leading indexing giants like the iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO). “[IBIT] is rubbing elbows with the biggest and the best,” said Bloomberg Intelligence’s Eric Balchunas.
The fast accumulation is affecting bitcoin’s price, which – after a brief “sell the news” tumble in the days following the first day of trading on Jan. 11 – has rebounded of late, carving out a multi-year high above $50,000 on Monday.
Whither GBTC?
In existence as a closed-end fund for many years prior to its conversion to a spot ETF last month, Grayscale’s GBTC has seen sizable and steady outflows ever since, with its AUM having been whittled down from about $30 billion to just under $24 billion as of Monday.
Many investors who bought the fund before it listed as an ETF are currently making over a 100% profit by selling it, a report by…
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