A row of US Bitcoin spot ETFs recorded no inflows, showing an attractive decline in the eyes of investors.
According to the analysis team of CoinDesk, the initial excitement over spot Bitcoin ETFs (a type of stock market-traded fund that invests primarily in Bitcoin) appears to be fading. This affects recent capital flows into funds, even causing net buying to fail to keep up with the exit rate, such as at Grayscale’s Bitcoin Trust (GBTC).
As a result, last week, the entire spot ETF saw a net outflow of 1,766 Bitcoin (about $118.3 million). Most funds such as Fidelity’s Bitcoin Wise Origin (FBTC), Invesco Galaxy Bitcoin ETF (BTCO) recorded capital “flow” of 0 USD. The situation of being net sold becomes easy to see.
That leaves BlackRock’s iShares Bitcoin Trust (IBIT) as the only one left with consistent inflows.
James Seyffart – ETF analyst at Bloomberg Intelligence, said that this is not unusual, because about 83% of funds in the US market have no capital at the beginning of each week.
He explained that withdrawals and redemptions of a spot ETF usually occur when there is a large enough gap between supply and demand. Compared to other risk prevention measures, this has a lower implementation cost.
“Volatility will cause the market leadership group to trade fund certificates like they do with stocks,” he added.
However, the recent cooling does not mean the market has to get used to smaller inflows into Bitcoin ETFs. Many analysts believe that this investment channel still has potential in the future.
Samir Kerbage, chief investment officer at Hashdex, who converted his Bitcoin futures fund into a Bitcoin spot ETF in March, said “there is definitely potential for a revival of capital inflows.”
According to him, many banks, endowments and pension funds around the world have just begun due diligence before considering allocating capital to Bitcoin through newly launched ETFs. As these major financial institutions make decisions in the coming months, net capital will rebound and reach new milestones.
“Bitcoin spot funds will be one of the most successful ETF launches in American history,” he predicts.
From the beginning of April until now, the world’s largest cryptocurrency has mainly traded below 70,000 USD per unit. Since the weekend alone, this currency has been around the $63,000 mark, down 15% from its record high.
In addition to Middle East tensions, the market is turning its attention to Bitcoin’s halving – an event every four years that reduces the reward for miners by half. The event is expected to take place in mid to late April, and is expected to help limit supply, thereby stimulating market prices into a new growth rhythm.