ETFs
Bitcoin ETFs See Third Day of Inflows, Price Surpasses $66,000
In another notable day for cryptocurrency investing, U.S.-based spot Bitcoin exchange-traded funds (ETFs) saw a significant influx of capital, totaling $257.3 million on Thursday. This significant influx marks the third consecutive day of large-scale investments in these funds, signaling robust and recurring interest among institutional and retail investors in Bitcoin.
The Grayscale Bitcoin Trust (GBTC) reported a positive inflow of $4.6 million, continuing its upward trend for the second day. BlackRock, a major player in the investment space, also saw a notable resurgence in inflows, capturing $93.7 million after three days of stagnation. This development indicates a revival trust in Bitcoin from a variety of investor bases.
Other ETF providers also saw impressive inflows: Fidelity reported $67.1 million, Bitwise $1.4 million, ARK Invest added $62 million, Invesco received $6.2 million , Franklin received $3.8 million and Valkyrie earned $18.5 million.
This sustained inflow trend among multiple providers highlights a collective bullish sentiment in the market. Renowned crypto analyst WhalePanda (@WhalePanda) highlighted the importance of these moves.
“Yesterday’s ETF flows through FarsideUK were again entirely positive at $257.3 million. […]. After the price returned to $66,500 on Wednesday, we had some consolidation and it is now [above $66,000]. No other major news has been announced, the fact that the price has not moved with these inflows indicates to me that there is another unload in this range.
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Good morning,
Yesterday’s ETF is circulating @FarsideUK was again entirely positive for $257.3 million.
Blackrock ultimately recorded cash inflows of $93.7 million again. Fidelity invested $67.1 million and Ark $62 million.
Even $GBTC was positive for $4.6 million.
After the price going back to… pic.twitter.com/qpJFCAoenS
– WhalePanda (@WhalePanda) May 17, 2024
The old Bitcoin ETF debate resumes
Amid this influx of enthusiasm, a fierce debate regarding transparency and the potential for market manipulation within the Bitcoin ETF ecosystem resurfaced yesterday. Tyler Durden, a pseudonymous crypto commentator, has expressed concerns about off-chain recording of Bitcoin transactions by large institutions like BlackRock.
“black rock can take as much Bitcoin as they want from Coinbase and the transaction is recorded off-chain. I would like to see all the ETF portfolios. […] This means they can borrow Bitcoin from Coinbase to short sell and are not required to show proof that they are holding 1:1. There is also a 2-30 day settlement. All payments are made in cash. The writing is on the wall, unless someone can find the on-chain ETF wallets.
Reply to these concerns, CoinRoutes President Dave Weisberger defended the practices mandated by regulatory guidelines: “OF COURSE they had to do it this way because of SEC-mandated “liquidity creation/redemption.” THE Authorized participants cannot “touch” Bitcoin, so it MUST engage in off-chain transactions. As I have said several times, ‘in kind’ would have been more effective and more transparent, but this scare campaign is absurd.”
Weisberger pointed out that ETFs are required by their charter to hold full Bitcoin spot backing for all settled stocks, ensuring compliance with regulatory standards.
Additionally, James Seyffart, a Bloomberg ETF expert, also weighed, supporting Weisberger’s point of view and hinting at the ongoing learning curve in the ETF industry regarding cryptocurrency trading. “The gang is learning about liquidity creation,” Seyffart said, “What a throwback to early December 2023. I pretty much agree with Dave here.”
At press time, BTC was trading at $66,109.
Featured image created with DALL·E, chart from TradingView.com