Bitcoin ETFs now $2B up on inflows to date, led by BlackRock

After a rocky start, bitcoin ETF shareholders are now well in the green

article-image

Shutterstock AI Image Generator modified by Blockworks

share

Investors have plowed billions of dollars into spot bitcoin ETFs since they launched last month — and so far, it’s paying off.

Altogether, the suite of new bitcoin-backed funds (not counting Grayscale Bitcoin Trust) have attracted $11.4 billion in capital inflows in the past five weeks.

Their respective issuers, a set of 10 led by BlackRock, Fidelity, Ark, 21Shares and Bitwise, have then used that cash to buy bitcoin on behalf of ETF shareholders.

They do so through crypto exchanges, mostly Coinbase and Coinbase Pro, but they also utilize prop trading firms such as the Dutch-founded Flow Traders.

  • Spot ETFs had accumulated 258,770 BTC as of Friday morning, per data shared by BitMEX Research. 
  • At $52,100 per coin, that’s $13.48 billion held by the ETFs — $2.08 billion more than the value that has flowed into those funds to date.
  • Buyers of these funds are overall up more than 18% since their January 11 debut. Bitcoin has meanwhile gained less than 12%.

BlackRock’s fund, IBIT, is the furthest ahead in terms of actual dollars. 

Read more: A month after launch, spot bitcoin ETF weekly net inflows hit new high

That’s mostly due to IBIT having the most assets under management (AUM) — 115,991 BTC ($6.04 billion) from $5.17 billion inflows, an appreciation of more than $870 million, or 17%, at current prices.

The chart below plots the differences between net inflows and the current value of bitcoin treasuries for each spot ETF.

All funds are beating bitcoin (except GBTC) but some more than others, despite dropping below zero in the first two weeks

Shareholders in Invesco-Galaxy’s offering, BTCO, are however way further ahead, albeit on a smaller scale. 

BTCO has attracted $241.4 million net flows and currently holds 5,970 BTC worth $311 million — a difference of almost $70 million, or 29%.

Valkyrie, Fidelity and VanEck funds are also further ahead than BlackRock’s, with around 20% gains.

BlackRock ETF has dollar-cost averaged into bitcoin

The variations in unrealized gains across the different funds illustrate distinct buying patterns between investor groups.

Plotting BlackRock inflows against bitcoin’s price, for example, shows investors have kept their IBIT allocations steady over time. 

This has essentially led IBIT to dollar-cost average into bitcoin at an even pace, converting to lower unrealized profits compared to Invesco-Galaxy’s fund BTCO.

BTCO instead saw two-thirds of its total inflows to date across just four days — Jan. 16 to 19 — as bitcoin floundered between $41,600 and $43,100 after dropping more than 15% in the days following the ETF debuts. 

Another surge in inflows occurred two days later, when BTC traded below $40,000 for the first time in more than a month.

Read more: Another bitcoin ETF just joined the $1B assets club. Will it be the last?

Bitcoin is now up by nearly one-third from that point, pushing BTCO, and its shareholders by extension, as far into the green as practically possible.

Some of those investors appear to have taken it one step further by taking profits, making BTCO the only bitcoin ETF, apart from GBTC, to record outflows since launch. 

Notice Invesco-Galaxy inflows (in blue) mostly came as bitcoin was dipping. BlackRock’s (in purple) are more spread out

Between Feb. 9 and 14, investors pulled more than 1,500 BTC ($78.1 million) from Invesco-Galaxy’s fund, equal to around 20% of its treasury at the time. The price of bitcoin rallied from under $45,500 to $50,000 across that period.

WisdomTree’s BTCW slightly trails the pack, having attracted the overwhelming majority of its inflows on its first day of trade — before bitcoin dipped.

As for Grayscale’s flagship fund, now an ETF in its own right, it has on average bled nearly 2,400 BTC ($124.9 million) per trading day this month. 

All told, the bitcoin pulled from GBTC since Jan. 11 was collectively worth $6.86 billion at the time of those outflows. 

That same amount of bitcoin (162,259 BTC) would now fetch $8.44 billion — potential gains of  23% left on the table, had that capital not immediately re-entered the market.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Avail.jpg

Research

Data publishing costs have historically been a bottleneck for rollups, and as more rollups launch, interoperability will continue to be a major challenge. Avail presents a potential solution to rollup fragmentation through its three products: Avail DA, Nexus, and Fusion, which together aim to unify the web3 experience.

article-image

Short-term “sell the news” reactions could follow new BTC price peaks months from now, industry watchers say — but only if history repeats itself

article-image

While crypto fundraising remains well off its bull market highs, Q1 data shows capital is returning to the space

article-image

Billed as a better BRC-20 fungible token standard, Bitcoin Runes launches tomorrow

article-image

Bitcoin miners need to explore unconventional energy avenues or be buried by the financial realities created by this halving

article-image

BlackRock’s iShares Bitcoin Trust continues to see daily positive net flows, though its inflow total for a single day hit a new low Wednesday

article-image

Binance is making moves, from receiving a new license in Dubai to switching its SAFU fund to USDC