CoinShares’ report reveals that crypto investment products have suffered $424M outflows since Monday. The report indicated that funds led by Grayscale’s GBTC and ProShares Bitcoin Strategy ETF (BITO) suffered the greatest outflows as investors switched to other spot Bitcoin exchange-traded funds (ETFs).
CoinShares research head James Butterfill revealed that though crypto investment products suffered a $424 million net outflow, the newly approved spot Bitcoin ETFs attracted $2 billion in inflows.
Butterfill observed that funds led by ProShares BITO ETF and GBTC fund suffered net outflows. The shift arises from the move by institutional investors to shift focus in favor of the approved spot Bitcoin EFs.
Grayscale’s GBTC Witnessed $1.18B Outflows
Butterfill revealed in a Wednesday, January 17 post on X (formerly Twitter) that investors executed $424 million net outflows. A detailed scrutiny of the trend showed a switch to cheaper funds within the US.
Butterfill observed that Grayscale’s GBTC suffered $1.18 billion in outflows since the unveiling of the spot Bitcoin ETFs. Also, ProShares BITO suffered $141 million outflows in the week.
The CoinShares report indicated that the top-five ranked crypto flows classified on provider and year-to-date activity illustrate that four are the newly approved spot Bitcoin ETFs.
The uptake of spot Bitcoin ETFs is gaining momentum following the historic decision by the Gensler-led Securities and Exchange Commission (SEC) to grant the green light to 11 bids.
BlackRock is among the firms whose bids turned successful, leading to the approval of the iShares Bitcoin Trust, besides Cathie Woord’s ARK 21Shares Bitcoin ETF by Ark Invest.
The newly approved spot Bitcoin ETFs started Thursday last week. The new products yielded $4.6 million on their inaugural day of trading. The trading volume broke the record previously recorded in May 2021 when $4.3 billion of trade was executed.
Butterfill admitted that the hype surrounding the spot Bitcoin ETFs is evident in the daily trade, ranging from $400M to $800M. The outcome is unsurprising, given the hype that dominated the second half of 2023. The researcher indicated that the hype has stimulated elevated turnover within the Europe-based ETPs.
Subsiding Volume in Subsequent Trading Days
Butterfill observed that the second and third days saw the spot Bitcoin ETFs suffer declined trading volume. The analyst dismissed the argument that failing to replicate the first-day performance signifies declining interest in the newly approved product.
Butterfill illustrated that the decline aligns with the typical pattern often witnessed following the flurry of trading activity on the inaugural day. He added that given time, the subsequent trading days would exhibit a clearer picture of the activity levels.
Bloomberg market analyst Eric Balchunas dismissed the claims of declining interest by noting that the ETF trading volume surpassed $10 billion in the initial three days.
Bloomberg Analyst Contextualizes Impressive BlackRock’s IBIT ETF Activity
Balchunas contextualized the $10 billion trading volume level to indicate remarkable progress.
The crypto ETF analyst at Bloomberg posted on the X platform that the spot Bitcoin ETFs dwarfed the performance of over 500 ETFs unveiled in 2023. The entire load of 500 ETFs collectively realized $450 million in Tuesday’s trading volume.
Balchunas observed that the best of the 2023 first-year class saw $45 million daily trading volume, with many taking months before they realized a footing. The analyst observed that BlackRock’s iShares Bitcoin Trust (IBIT) saw more activity than the collective 2023 first-year class.
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