Inflows Dip Despite Prior Surge

After an impressive run, spot Bitcoin ETFs appear to have hit a snag as inflows saw a minor reduction.

Lookonchain’s latest analysis reveals a concerning trend in the cryptocurrency market as Bitcoin ETFs experience a significant decrease in inflows.

Bitcoin Inflows Hit Snag

According to the provided data, only 18,477 BTC, equivalent to $951 million, were added across 8 ETFs from 12th February to 16th February, marking a stark contrast to the previous week’s influx of 47,961 BTC, which is approximately $2.47 billion.

Of particular note is Grayscale, which saw substantial outflows of 9,557 BTC, valued at $492 million.

8 ETFs added only 18,477 $BTC($951M) last week, while added 47,961 $BTC($2.47B) in the week “02-12 to 02-16”.#Grayscale decreased by 9,557 $BTC($492M) last week. pic.twitter.com/FlEvkEGohK

— Lookonchain (@lookonchain) February 26, 2024

Grayscale’s Bitcoin Trust (GBTC) has been experiencing a notable decrease in outflows only recently. By the conclusion of January, GBTC recorded total outflows of over $5 billion, with a particularly significant outflow of $640 million recorded on January 22nd alone. Throughout February, there has been a diminishing trend in outflows totaling $1.8 billion.

GBTC has observed a total outflow of $7.4 billion since the very beginning. The latest data by BitMEX Research, in fact, highlighted that on February 23rd, GBTC recorded withdrawals of $44.2 million, representing the lowest daily volume since its transition to an ETF on January 11th from its previous status as an over-the-counter product.

It is also important to note that spot Bitcoin ETFs collectively attracted a total volume of $1.2 billion, which is a significant increase of nearly 80% from the initial cumulative volume of $28.3 billion recorded at the start of the month.

Leading the pack is BlackRock’s iShares Bitcoin Trust (IBIT), which accounted for over $457 million. Following closely behind is GBTC with more than $348 million, trailed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) at a little over $255 million.

Shift in Investor Sentiment; Gold Funds Face Exodus

Spot Bitcoin ETFs have become immensely popular, sparking a significant change in investor sentiment and even serving as a potential replacement for investments in gold. Since their launch on January 11, billions have poured into these products that allow ordinary investors exposure to the price moves of the crypto asset, while a considerable amount has exited gold ETFs.

Notably, the top gold ETFs in terms of assets under management, SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), have experienced net outflows. GLD, starting in 2024 with $58 billion in assets under management, and IAU, with $26 billion, both reflect this trend. The departure from gold ETFs has notably accelerated following the introduction of the 10 spot Bitcoin ETFs, highlighting a significant shift in investor sentiment.