BTC eclipses $71K after near-record flow day for spot ETFs

The $887 million of net inflows was the category’s second-best total in a single day since their January launches


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US spot bitcoin ETFs just saw one of their largest ever net inflow days nearly five months after launch. 

The 11-fund category brought in net new capital of $887 million on Tuesday, according to Farside Investors data — the highest total since notching $1 billion worth of inflows on March 12.

BTC’s price soared above $71,300 in the hours after yesterday’s market close. It stood at roughly $71,600 at about 12 pm ET — up 4.6% from a week ago.    

The Fidelity Wise Origin Bitcoin Fund (FBTC) led the way with $379 million (roughly 43% of the day’s total), the data shows. BlackRock’s iShares Bitcoin Trust (IBIT) followed with $274 million.

IBIT, which has an AUM of $20.5 billion, last week surpassed the Grayscale Bitcoin Trust ETF (GBTC) to become the largest spot BTC fund. FBTC sits behind GBTC, managing more than $9 billion.

Read more: What we learned from the latest ETH ETF filing dump

The total reflects a continued resurgence of demand for these products after a bumpy two or so months of slowing demand.

US spot BTC funds bled $888 million between March 18 and March 22 before enduring outflows of $345 million in the month of April. An additional $564 million exited the offerings on May 1, marking the highest outflows for a single day.

Industry watchers attributed the down period for bitcoin ETFs to macro factors like higher-for-longer interest rate expectations and geopolitical concerns.

Zach Pandl, Grayscale’s head of research, called the newest wave of bitcoin ETF demand “notable.”

“It is likely that institutional investors and various firms are completing their due diligence on these products and are continuing to add them to their portfolios and platforms,” he told Blockworks in an email. “As long as the macro backdrop remains favorable, Grayscale Research expects continued ETF inflows to take bitcoin’s price to new highs this summer.” 

Read more: How are advisers using bitcoin ETFs in client portfolios? It depends.

Demand resurgence follows regulatory developments

Indeed, the early days of a seeming shift in the crypto regulatory winds appears to be among the factors reversing that demand slowdown.  

Sixty-four percent of financial advisers cited regulatory uncertainty as a barrier to greater crypto adoption in portfolios, according to a January survey by Bitwise and VettaFi.

“Imagine, then, how much of that $20 trillion will go into crypto when the biggest barrier gets lifted,” Bitwise Chief Investment Officer Matt Hougan wrote in a Monday blog post.

The US Senate on May 16 passed Joint Resolution 109 in an effort to overturn the Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) 121. The bulletin said that crypto custodians should report a liability and “corresponding assets” on their balance sheets for the crypto assets they hold. 

The House then on May 22 passed a crypto market structure bill — the Financial Innovation and Technology for the 21st Century (FIT21) Act — after 71 Democratic House members joined Republicans in approving the measure.

The SEC approved 19b-4 proposals related to spot ether ETFs later that week. 

Read more: On the Margin Newsletter: What needs to happen before ETH ETFs hit your brokerage accounts

Galaxy Digital CEO Mike Novogratz told Bloomberg that BTC could hit $100,000 by the end of the year — noting: “DC has agreed in principle that crypto legislation has to happen [and] that it should be bipartisan.”

Though President Joe Biden vetoed Joint Resolution 109 last week, Hougan called it “a minor setback.”

He added: “If people understood the ramifications of the shift in DC, the crypto market would be at new all-time highs.”

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