In another great day for cryptocurrency investments, US-based bitcoin exchange-traded funds (ETFs) saw a significant inflow of capital, totaling $257.3 million on Thursday. This large influx marks the third consecutive day of large-scale investments in these funds, indicating strong interest and returns among both institutional and retail investors in Bitcoin.
Grayscale Bitcoin Trust (GBTC) reported a positive inflow of $4.6 million, continuing its upward trend for a second day. BlackRock, a major player in the investment space, also saw a notable rebound in inflows, taking in $93.7 million after a three-day slump. This development signals renewed confidence in Bitcoin from a variety of investor bases.
Other ETF providers also saw impressive inflows: Fidelity reported $67.1 million, Bitwise took in $1.4 million, ARK Invest added $62 million, Invesco received $6.2 million, Franklin made $3.8 million, and Valkyrie earned $18.5 million.
The ongoing inflow trend across multiple providers underscores the collective bullish sentiment in the market. Popular cryptocurrency analyst WhalePanda (@WhalePanda) highlighted the importance of these movements.
“Yesterday ETF flows by FarsideUK were quite positive again at $257.3 million. (…). After the price returned to $66,500 on Wednesday, we got some consolidation and it is now (above $66,000). No announcement yet For any other major news, the fact that the price did not move with these flows suggests that there is another extremity unloading in this range.
Good morning,
ETFs poured in yesterday @FarsideUK It was completely positive again for $257.3 million.
Blackrock finally got $93.7 million in inflows again. Fidelity made $67.1 million and Ark made $62 million.
until $GBTC It was positive for $4.6 million.
After prices return to… pic.twitter.com/qpJFCAoenS
– Whale Panda (@WhalePanda) May 17, 2024
Controversy over legacy Bitcoin ETFs reignited
Amid the outpouring of excitement, a sophisticated debate emerged yesterday regarding transparency and the potential for market manipulation within the Bitcoin ETF ecosystem. Tyler Durden, a pseudonymous cryptocurrency commentator, expressed concerns about off-chain recording of Bitcoin transactions by large institutions like BlackRock.
“Blackrock can take as much bitcoin as they want from Coinbase and the transaction is recorded off-chain. I would like to see all ETF wallets. (…) This means they can short borrow bitcoin from Coinbase and are not required to show any proof of That they have 1:1 there is also 2-30 day settlement. All settlements are done in cash, unless someone can find on-chain ETF portfolios.”
Respond to these FearsDave Weisberger, Chairman of CoinRoutes, defended the practices imposed by the regulatory guidelines: “Of course they had to do it this way because of the 'create/redemption' mandated by the SEC. Authorized participants cannot 'touch' spot bitcoin, So they have to engage in off-chain transactions and as I have repeatedly said, 'in-kind' would have been more efficient and transparent, but this fear mongering is nonsense.”
Weisberger stressed that ETFs are required by their charter to have full backing in spot Bitcoin for all stable stocks, ensuring compliance with regulatory standards.
Moreover, James Seyphart, Bloomberg ETF expert, too Weigh, supports Weisberger's point and alludes to the ongoing learning curve in the ETF industry regarding cryptocurrency transactions. “The gang learned how to create cash, what a throwback to early December 2023,” Seyphart said. “I completely agree with Dave here.”
At press time, Bitcoin was trading at $66,109.
Featured image created with DALL·E, chart from TradingView.com