Ben Strack

BlackRock’s spot bitcoin ETF had tallied net inflows on every trading day since launching on Jan. 11. That 71-day streak has ended, according to Farside Investors data.&nbsp;



The iShares Bitcoin Trust (IBIT) saw zero net flows on Wednesday — shattering an unprecedented record for a newly launched ETF.&nbsp;



While IBIT’s run was historic for a fund new to the market, according to Bloomberg Intelligence analyst Eric Balchunas, others had longer streaks after establishing themselves over months and years on the market.



IBIT extended its inflow streak to 71 days on Tuesday, marking the 10th-longest streak of all-time, Balchunas said in an X post.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/search?q=%24IBIT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$IBIT</a> inflow streak now 71 days which has it officially in the Top 10 all time after passing the ETF One Hit Wonder <a href="https://twitter.com/search?q=%24JETS&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$JETS</a> (remember JETSanity?). Also passed <a href="https://twitter.com/search?q=%24BND&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BND</a> and <a href="https://twitter.com/search?q=%24VEA&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$VEA</a> which are cash vacuum cleaners. Lot of mountain still left to climb tho. h/t <a href="https://twitter.com/thetrinianalyst?ref_src=twsrc%5Etfw">@thetrinianalyst</a> <a href="https://t.co/NpZzgQe4v3">pic.twitter.com/NpZzgQe4v3</a>&mdash; Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1783108200511750517?ref_src=twsrc%5Etfw">April 24, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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But <a href="https://farside.co.uk/?p=997">data</a> by London-based asset manager Farside Investors showed that net inflows into IBIT had ceased on Wednesday.&nbsp;



Only the Fidelity Wise Origin Bitcoin Fund (FBTC) and the Ark 21Shares Bitcoin ETF (ARKB) saw slight inflows on the day, while the Grayscale Bitcoin Trust ETF (GBTC) tallied net outflows of $130 million.



The end of IBIT’s streak comes after two straight weeks of net outflows for the 11-fund segment.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-etf-outflows-gbtc">Bitcoin ETF snapshot: GBTC drives second straight week of outflows</a>



Still, net inflows into the 11-fund category stand at $12.3 billion in their three-plus months of trading. IBIT alone has gathered about $15.5 billion in positive net flows to mostly offset GBTC’s nearly $17 billion of bleeding. The net money entering IBIT amounted to about 20% of BlackRock’s total ETF net inflows during the year’s first quarter.&nbsp;&nbsp;



IBIT’s assets under management stood at roughly $17.6 billion, according to BlackRock’s website. That is second in the bitcoin ETF category to GBTC, which has nearly $19.4 billion.



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BlackRock’s bitcoin ETF inflows halt after 71-day streak, data shows

Demand for spot bitcoin ETFs has slowed down in the days ahead of the BTC halving.&nbsp;



The fund category collectively tallied net outflows for a fifth straight day on Thursday — albeit only slightly at about $4 million, according to Farside Investors data.



The five-day net outflow total beginning on April 12 amounts to $319 million, reflecting an average of $64 million over the span. That peaked on Wednesday, when $165 million left the 11-fund sector.&nbsp;&nbsp;&nbsp;



Such an outflow streak has happened just once before, with US spot bitcoin ETFs bleeding assets each day from March 18 to March 22. Those outflows were heavier than the latest active streak, totaling $888 million.



The main culprit driving the net outflows is the Grayscale Bitcoin Trust (GBTC). The higher-priced fund, which converted to an ETF in January, has averaged $116 million of net outflows per day over the last five trading days.



Aside from GBTC, only the Ark 21Shares Bitcoin ETF (ARKB) has contributed any meaningful net outflows, seeing $43 million exit the fund on Wednesday. Others meanwhile have watched their inflows completely stop.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



Unique to its competitors, the flow-gathering leader in the space, BlackRock, has kept its daily flows positive.&nbsp;



Nine US spot bitcoin ETFs saw zero inflows on both April 12 and April 15, according to Farside Investors <a href="https://farside.co.uk/?p=997">data</a>. IBIT’s net inflows were $111 million and $73 million on those days, respectively.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/blackrock-extends-bitcoin-etf-inflows">BlackRock extends bitcoin ETF inflows lead as category demand slows</a>



Still, net inflows into BlackRock’s iShares Bitcoin Trust (IBIT) hit an all-time low level of $18 million on Wednesday, and about $19 million on Thursday. The Fidelity Wise Origin Bitcoin Fund (FBTC) edged IBIT in net flows on Thursday, tallying $37 million.&nbsp;



But the world’s largest asset manager is the only bitcoin ETF issuer to see net inflows each day since starting to trade on Jan. 11.&nbsp;



The streak stands at 68 days after Thursday’s positive total, according to data by Bloomberg Intelligence analyst Eric Balchunas.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Speaking of <a href="https://twitter.com/search?q=%24IBIT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$IBIT</a> it has slid into 13th place all time with inflow streak of 67 days.. total net flows now at $15.3b which is second most of all 3000+ ETFs and $5b ahead of #3. <a href="https://t.co/YSGFvn7ZAM">pic.twitter.com/YSGFvn7ZAM</a>&mdash; Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1780951564200395129?ref_src=twsrc%5Etfw">April 18, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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US spot bitcoin ETFs have welcomed about $12.3 billion of net inflows in just over three months on the market — even with $16.7 billion leaving GBTC.



As for the recent outflows, Balchunas added in a separate X post that it is “totally normal for [an] ETF category to cool off after [a] breathtaking pace like this,” particularly during a bitcoin price dip.



<a href="https://blockworks.co/news/bitcoin-below-60k-pre-halving-volatility">Bitcoin’s price dropped below $60,000 on Wednesday</a>, just a few days ahead of the bitcoin halving. A roughly quadrennial event, this halving will result in the number of bitcoins produced per block falling from 6.25 BTC to 3.125 BTC. The halving is expected to occur late Friday ET.



One BTC was worth nearly $65,000 just after 7 a.m. ET Friday — down about 7% from a week ago.



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Bitcoin ETF segment sees record-tying fifth straight day of outflows

The assets leaving Grayscale Investment’s spot bitcoin ETF hit a new single day low, helping the broader fund category end a two-day net outflow streak.&nbsp;



The Grayscale Bitcoin Trust ETF (GBTC) saw $17.5 million of net money leave its fund Wednesday, according to Farside Investors data. The total was a record low and reflected a substantial dip from net outflows of $303 million on Monday and $155 million on Tuesday.&nbsp;



Helped by the shrunken GBTC outflow total Wednesday, the 11-fund US spot bitcoin ETF segment notched net inflows of $124 million.&nbsp;



The BTC funds cumulatively endured net outflows of $224 million and $19 million on Monday and Tuesday, respectively, the <a href="https://farside.co.uk/?p=997">data</a> shows.



Bitcoin’s price hovered around 70,440 at 7:30 a.m. ET — up nearly 7% from a week ago.



Grayscale’s bitcoin product has seen net outflows every trading day since converting to an ETF on Jan. 11. The GBTC asset oozing peaked at $642 million on March 18.



The trust’s hemorrhaging of assets was somewhat expected, in part because of GBTC’s 1.5% fee — a significantly higher price point than the nine competing spot bitcoin ETFs that launched on the same day.



Read more: <a href="https://blockworks.co/news/gbtc-net-outflows-etf">GBTC net outflows reach $10 billion two months after ETF conversion</a>



GBTC’s net outflows of $17.5 million on Wednesday fell below the previous low of $22 million on Feb. 26.&nbsp;



ETF.com senior analyst Sumit Roy told Blockworks at the time that he believed the initial selling by arbitrageurs and those wanting to move to cheaper funds was “largely over.” GBTC outflows ramped up in the days after, however, rising to nearly $600 million on Feb. 29.



Some segment observers attributed continued GBTC outflows in recent weeks to bankrupt lender Genesis <a href="https://blockworks.co/news/bankrupt-genesis-offloading-gbtc-shares">offloading its shares</a> of the fund. The company’s stake in the Grayscale fund was worth roughly $1.6 billion in mid-February.&nbsp;&nbsp;&nbsp;



But Genesis and its affiliates had “fully monetized” their nearly 36 million GBTC shares as of April 2, court documents note — and proceeds of the sales were used to buy 32,041 BTC. 



“I think it&#8217;s much too soon to call the end of GBTC&#8217;s outflows,” Roy told Blockworks Thursday. “We need to see many days of small outflows — or even inflows — before we can make that call.”



The GBTC ETF’s net outflows stand at nearly $16 billion overall. Despite that total weighing down the broader US spot bitcoin fund category down, the segment has notched $12.5 billion of net inflows during their three months on the market.



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Spot bitcoin ETF flows turn positive again as GBTC outflows taper

Net inflows into spot bitcoin ETFs slowed last week, but remained positive before bitcoin’s price shot up above $72,000 Monday morning.



Bankrupt lender Genesis finished selling its shares of the Grayscale Bitcoin Trust ETF (GBTC) — a process that appeared to periodically weigh down the segment from a flows perspective.



The 11-fund US BTC fund segment reeled in $485 million of positive net flows from April 1 to April 5, according to Farside Investors <a href="https://farside.co.uk/?p=997">data</a>.



Read more: <a href="https://blockworks.co/news/etfs-helped-legitimize-bitcoin-halving-cme">ETFs helped ‘legitimize’ bitcoin ahead of halving: Q&amp;A</a>



The total — reflecting an average daily net inflow of $97 million — was a slowdown from the average daily inflows of $211 million seen during the week prior, and the $214 million daily average since the ETFs launched on Jan. 11.&nbsp;&nbsp;



Year-to-date inflows into digital asset investment products hit $13.8 billion last week. This was driven by the spot bitcoin ETFs, CoinShares research head James Butterfill said in a Monday report. This total is already by far more than the $10.6 billion seen in all of 2021.&nbsp;



“Despite this, there are signs that appetite from ETF investors is moderating, not achieving the weekly flow levels seen in early March,” Butterfill <a href="https://blog.coinshares.com/volume-177-digital-asset-fund-flows-weekly-report-b1855bff6f4e">noted</a>. “Volumes last week declined to $17.4 billion for the week compared to $43 billion in the first week of March.”



Read more: <a href="https://blockworks.co/news/bitcoin-etf-snapshot-record-inflows">Bitcoin ETF snapshot: Segment’s week net inflows hit record $2.5B</a>



BlackRock’s iShares Bitcoin Trust (IBIT) led the segment once again, with $811 million of net inflows last week. Fidelity’s Wise Origin Bitcoin Fund (FBTC) followed, bringing in $395 million.&nbsp;



Grayscale Investments’ Bitcoin Trust ETF (GBTC) continued to bleed assets, tallying $738 million of net outflows during the week. The average daily net outflows from the Grayscale offering stood at $148 million from April 1 to April 5 — down from $242 million during the week prior.&nbsp;



<a href="https://blockworks.co/news/bitcoin-etf-net-outflows-record">GBTC net outflows had accelerated in mid-March</a>, leading to asset losses for the bitcoin ETF sector at large.&nbsp;



Industry watchers had noted a potential driver was bankrupt lender Genesis <a href="https://blockworks.co/news/bankrupt-genesis-offloading-gbtc-shares">offloading its GBTC shares</a>. The holdings were worth roughly $1.6 billion in mid-February.&nbsp;&nbsp;&nbsp;



But court documents filed Friday show that Genesis and its affiliates had “fully monetized” their nearly 36 million GBTC shares as of April 2. Proceeds of the sales were used to buy 32,041 BTC, the filings indicate.



Spot bitcoin ETF inflows have helped drive a record seven-month streak of bitcoin price growth.&nbsp;



But Fineqia research analyst Matteo Greco told Blockworks there has been “increased profit-taking” among bitcoin ETF investors, adding that could spell “the possibility of a downward trend in April or in one of the following months.”



Read more: <a href="https://blockworks.co/news/btc-record-monthly-growth-streak-jeopardized">Why BTC’s record monthly growth streak could be in jeopardy</a>



The price of bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) was roughly $72,400 at 7:30 am ET — up about 1.6% from a week ago.&nbsp;



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Bitcoin ETF snapshot: Net inflows slow, but continue prior to BTC price rise

Crypto asset manager Hashdex’s bitcoin futures fund is now able to hold BTC directly — finally joining a segment that has seen heavy demand over the past two-plus months.



The Hashdex Bitcoin Futures ETF (DEFI), which launched in September 2022, has been renamed the Hashdex Bitcoin ETF — retaining the same ticker on NYSE Arca.&nbsp;



The change reflects a new investment strategy, effective Wednesday, by which the fund intends to invest at least 95% of its assets in spot bitcoin, the company said.&nbsp;



Up to 5% of DEFI’s remaining assets may be invested in bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), as well as in cash or cash equivalents. &nbsp;



While Hashdex is the fund’s crypto adviser, Tidal Investments is DEFI’s sponsor.



The change comes nearly 11 weeks after the Securities and Exchange Commission cleared 10 spot bitcoin ETFs to launch in the US.



Industry watchers had expected Hashdex to convert the futures fund to a spot bitcoin ETF on Jan. 11 with that group of products.&nbsp;



Hashdex Chief Investment Officer Samir Kerbage said in a Jan. 10 statement that the company was well-suited to be among the first US products offering investors exposure to spot bitcoin pricing given its “extensive experience” running spot bitcoin ETFs in other regions.



But the Brazil-based fund manager clarified in a news release the following day that it was still awaiting clearance from the SEC before changing DEFI’s name and investment strategy.



Though the SEC approved proposals by stock exchanges Nasdaq, NYSE Arca and Cboe BZX to list 11 spot bitcoin ETFs, including Hashdex’s, the regulator did not allow Hashdex’s registration statement to go “effective” — a necessary step before DEFI’s investment change could be made official.



Hashdex’s transformed ETF joins a category that has so far thrived — tallying net inflows of $11.7 billion since hitting the market, according to BitMEX Research <a href="https://twitter.com/BitMEXResearch/status/1772932061449392187">data</a>.



The segment collectively notched positive net flows on Monday and Tuesday following a record five straight days of net outflows for the 10 funds.



Bitcoin’s price hit a new all-time high — above $73,000 — earlier this month. It stood at roughly $70,100 at 7:30 a.m. ET Wednesday, up about 13% from a week ago.



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And then there were 11: Another fund joins the US spot bitcoin ETF fold

The 10 US spot bitcoin ETFs collectively saw net outflows each day last week — an unprecedented streak for the so far successful segment.&nbsp;



The funds saw $888 million of investor money leave over the five-day span, according to BitMEX Research data. The largest outflow chunks came on March 19 and March 20, at $326 million and $262 million, respectively.&nbsp;



Those net outflows slowed later in the week, with $94 million coming on Thursday and $52 million flowing out on Friday.&nbsp;



BlackRock’s iShares Bitcoin Trust (IBIT) had its all-time low flow total for a single day on Friday, tallying just $19 million, the BitMEX Research <a href="https://twitter.com/BitMEXResearch/status/1771465855680823612">data</a> shows.&nbsp;



Still, IBIT — along with the Fidelity Wise Origin Bitcoin ETF — have brought in net inflows during each of their first 50 days trading. Such a feat has never been accomplished by new ETFs, analysts <a href="https://twitter.com/EricBalchunas/status/1771173278284964242">note</a>.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-etfs-tradfi-convergence">Bitcoin ETF catalyzing broader merge of TradFi, crypto: BlackRock exec</a>



It was the first time the sector saw five straight days of net outflows. The ETFs had notched outflows on four straight days from Jan. 22 to Jan. 25.



The latest outflow streak came after a record week for the funds, during which they saw <a href="https://blockworks.co/news/bitcoin-etf-snapshot-record-inflows">$2.5 billion of net inflows</a>.&nbsp;&nbsp;



But bitcoin’s price dropped from nearly $68,000 on March 18 to below $61,000 on — a slip of more than 10%. It fluctuated up and down later in the week, but remained well off its all-time high of more than $73,000 set on March 14.



BTC’s price stood at $67,000 at about 7 a.m. ET Monday.&nbsp;&nbsp;



“We believe the recent price correction led to hesitancy from investors, leading to much lower inflows into new ETF issuers in the US,” CoinShares head of research James Butterfill wrote in a Monday <a href="https://blog.coinshares.com/volume-175-digital-asset-fund-flows-weekly-report-6af2a10c0b30">report</a>.



The new ETF bitcoin fund issuers exclude Grayscale Investments, which converted its Bitcoin Trust (GBTC) to an ETF on Jan. 11. GBTC’s nine competitors have often been able to more than offset the higher-priced Grayscale fund’s persistent outflows, but not last week.&nbsp;



GBTC outflows amounted to about $2 billion, while the other nine funds brought in about $1.1 billion.



Bloomberg Intelligence analyst James Seyffart said in a Monday X <a href="https://twitter.com/JSeyff/status/1772216608242721131">post</a> that outflows may have been driven in part by bankrupt lender <a href="https://blockworks.co/news/bankrupt-genesis-offloading-gbtc-shares">Genesis offloading its shares of GBTC</a>.&nbsp;



“Expecting that to slow over the next week,” he added.



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Bitcoin ETF snapshot: Net outflow run hits five days for the first time

US spot bitcoin ETFs have seen net money leave the category for four straight days, matching the longest streak in their 10 weeks of trading.



Put another way, one bitcoin fund’s outflows have accelerated while the others have not been able to offset the bleeding.



The 10 BTC funds endured net outflows amounting to $94 million on Thursday, putting the segment’s cumulative bleeding at $836 million so far this week, according to Farside Investors <a href="https://farside.co.uk/?p=997">data</a>.&nbsp;



Spot bitcoin ETFs in the US have tallied $11.3 billion of net inflows since launching on Jan. 11. The funds saw about $2.5 billion of capital enter the funds last week, an all-time high over such a span.



Read more: <a href="https://blockworks.co/news/bitcoin-etf-snapshot-record-inflows">Bitcoin ETF snapshot: Segment’s week net inflows hit record $2.5B</a>



But <a href="https://blockworks.co/news/cheatsheet-microstrategy-buy-march-19">net outflows from the Grayscale Bitcoin Trust ETF (GBTC) peaked</a> on Monday at $642 million, more than offsetting the $452 million of net inflows from the segment’s fastest-growing iShares Bitcoin Trust (IBIT).&nbsp;



Overall, GBTC’s average daily net outflows in this week’s first four days was $458 million — outpacing the average daily net inflows over that time for BlackRock’s IBIT, which is $202 million.



Outflows were expected for GBTC, which was previously a trust listed on OTC markets, with shares trading at a discount in recent years. It is priced significantly higher than the other spot bitcoin ETFs, carrying a fee of 1.5%.&nbsp;



Bankrupt lender Genesis was also granted approval last month <a href="https://blockworks.co/news/bankrupt-genesis-offloading-gbtc-shares">to offload roughly $1.6 billion worth of GBTC shares</a> — a potential driver of the exodus.



The four straight days of net outflows for the spot bitcoin funds is the first such streak since Jan. 22 to Jan. 25. Net outflows were more muted during that span, BitMEX Research <a href="https://twitter.com/BitMEXResearch/status/1770732510009274597">data</a> shows — totaling $432 million.



The recent outflows have come as bitcoin’s price took a dive this week in the days after reaching a new all-time high above $73,000. It went as low as about $61,000 on Tuesday.&nbsp;



The BTC price has since recovered, and was at about $64,800 at 6:55 a.m. ET Friday — down roughly 7.5% from a week ago.



Some industry watchers have said they expect another wave of inflows for spot bitcoin ETFs once more wirehouses — such as Morgan Stanley, Merrill Lynch, Wells Fargo and UBS — <a href="https://blockworks.co/news/wealth-managers-feel-pressure-bitcoin-etfs#">clear such funds for their clients</a>.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-etfs-tradfi-convergence">Bitcoin ETF catalyzing broader merge of TradFi, crypto: BlackRock exec</a>



Bitwise Chief Investment Officer Matt Hougan said during a panel at Blockworks’ Digital Asset Summit on Tuesday that he expected such platforms could start approving access to the bitcoin funds in as little as a week.



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Bitcoin ETF net outflows streak hits four days, $836 million

Wealth management firm Cetera Financial Group has approved four bitcoin ETFs for advisers choosing to implement such funds into client portfolios.&nbsp;



The San Diego-based firm said Thursday it would launch educational training to its financial professionals as they consider allocations to bitcoin ETFs — marking the latest asset manager to make such a move.&nbsp;&nbsp;



Cetera has so far greenlit adviser allocations to four of the 10 US spot bitcoin ETFs: BlackRock’s iShares Bitcoin Trust (IBIT); the Fidelity Wise Origin Bitcoin Fund (FBTC); the Franklin Bitcoin ETF (EZBC); and the Invesco Galaxy Bitcoin ETF (BTCO).&nbsp;&nbsp;&nbsp;



The company had $190 billion in assets under management, as of December 2023.



“We will continue to proactively evaluate the implications of bitcoin ETFs and related products and modify our policies accordingly, and we look forward to partnering with our financial professionals to adopt bitcoin ETFs when appropriate with their clients,” Matt Fries, Cetera’s head of investment products and partner solutions, said in a statement.



Read more: <a href="https://blockworks.co/news/wealth-managers-feel-pressure-bitcoin-etfs">Restricting access to growing bitcoin ETFs becoming ‘hard to justify’</a>



Cetera appeared to lean toward the bitcoin ETFs offered by larger firms with a TradFi bent.



BlackRock’s iShares lineup manages more than $2.7 trillion in assets, while the assets in Invesco’s US ETFs amount to about $500 billion, according to ETF.com.&nbsp;



Financial services giants Fidelity Investments and Franklin Templeton have roughly $67 billion and $16 billion, respectively, in their US ETF complexes.&nbsp;



These providers have “track records of successfully launching new product strategies, and are well positioned with established resources, tools and knowledge,” Cetera noted in its Thursday news release.&nbsp;&nbsp;



The 10 US spot bitcoin ETFs have tallied nearly $12 billion of net inflows in their first nine weeks of trading, according to BitMEX Research <a href="https://twitter.com/BitMEXResearch/status/1768556378858103064">data</a>. Despite its roughly $11.7 billion of net outflows, the Grayscale Bitcoin Trust ETF (GBTC) leads the category with more than $26 billion in assets. IBIT and FBTC are next, with about $15.9 billion and $9.2 billion, respectively.&nbsp;&nbsp;



Cetera chose not to yet approve GBTC, which carries a 1.5% fee that is substantially higher than competitors.&nbsp;



For now, it also left out access to the Ark 21Shares Bitcoin ETF (ARKB) and the Bitwise Bitcoin ETF (BITB). Those two funds have significantly higher assets under management than EZBC and BTCO — with each above $2 billion.



Cetera’s guidance around bitcoin ETFs comes as industry watchers say more wealth managers and investment platforms are likely to unlock the use of such products for allocators in the coming months.



Read more: <a href="https://blockworks.co/news/wealth-managers-bitcoin-etfs">‘Primary market’ for bitcoin ETFs largely hasn’t yet adopted such funds</a>



Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-02-23/ria-carson-group-greenlights-four-spot-bitcoin-etfs-for-retail-buyers">reported</a> last month that Carson Group — a Nebraska-based registered investment adviser (RIA) — greenlit the use of four bitcoin ETFs.



Other similarly-sized RIAs have chosen not to, such as Savant Wealth Management. The firm, which manages about $25 billion in assets, told Blockworks last month that it had no plans to approve the bitcoin ETFs — noting “we prefer to work with asset classes that can provide us with a good basis for understanding the expected return.”



In terms of financial giants making the bitcoin funds available, a Wells Fargo spokesperson <a href="https://blockworks.co/news/merrill-wells-fargo-offer-bitcoin-etfs">confirmed to Blockworks that the bitcoin ETFs are available</a> for “unsolicited purchases” through one of the firm’s advisers, or through its online WellsTrade platform.Vanguard, however, <a href="https://blockworks.co/news/vanguard-disallows-bitcoin-etf-trading">does not allow for such funds to trade</a> on its brokerage platform — calling the investment case for crypto “weak.”



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$190B wealth manager greenlights 4 bitcoin ETFs for allocators

Two US Senators unhappy with how spot bitcoin ETFs have been marketed are imploring the Securities and Exchange Commission to halt any future crypto fund approvals.



In a letter dated March 11 to Securities and Exchange Commission Gary Gensler, Sens. Jack Reed (D-R.I.) and Laphonza Butler (D-Calif.) implored the SEC to crackdown on “alarming deficiencies” they say exist in communications to investors within the asset class.



They also asked the US regulator to refrain from approving more exchange-traded products linked to other crypto assets.&nbsp;&nbsp;&nbsp;&nbsp;



<a href="https://blockworks.co/news/sec-approves-bitcoin-etf">Ten US spot bitcoin ETFs launched on Jan. 11</a> after years of fund issuer attempts to bring such funds to market.&nbsp;&nbsp;&nbsp;



“The SEC’s approvals have provided a green light for Wall Street to sell volatile cryptocurrency investments to ordinary Americans through their brokerage and retirement accounts,” Reed and Butler wrote in the <a href="https://twitter.com/AlexanderGrieve/status/1768373756169261076?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1768373756169261076%7Ctwgr%5Ef49173a444d943c7dcc0b04b9f2648a5a1a4cb3b%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.coindesk.com%2Fpolicy%2F2024%2F03%2F15%2Fdemocrats-ask-secs-gensler-to-block-approval-of-more-crypto-etps%2F">letter</a>. “Given the significant and unique risks posed by cryptocurrency, is it critical that Americans receive accurate, comprehensive information about bitcoin ETPs.”



The senators allude to a January report by the Financial Industry Regulatory Authority (FINRA), which found that 70% of the 500 analyzed crypto-related communications to retail investors from FINRA member firms had “potential substantive violations.”



The possible violations relate to FINRA Rule 2210, which “prohibits claims that are false, exaggerated, promissory, unwarranted or misleading.”&nbsp;



Some companies failed to differentiate between crypto assets offered through the firm and those provided through a third party, the agency’s <a href="https://www.finra.org/rules-guidance/guidance/targeted-examination-letters/crypto-asset-communications">analysis</a> concluded. Other communications implied that crypto assets functioned like cash.



The FINRA review of crypto-related communications did not focus on ETFs specifically.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/finra-crypto-firms-investor-protection">70% of crypto communications potentially misleading, FINRA analysis finds</a>



<h2 class="wp-block-heading">The fate of potential future crypto ETPs?</h2>



In addition to urging the SEC to “scrutinize” such communications to investors about these products, Reed and Butler said the SEC should “strictly limit the precedential application of these approvals.”



“While the bitcoin market has displayed serious weaknesses, it is nonetheless far more established and scrutinized than the market for any other cryptocurrency,” the senators added. “However vulnerable bitcoin may be to fraud and manipulation, markets for other cryptocurrencies are far more exposed to misconduct.”



The SEC is considering a number of <a href="https://blockworks.co/news/bitcoin-etfs-approved-ether-funds-next">applications for ETFs that would hold ether</a> directly.&nbsp;



Ether is the second-largest crypto asset with a market capitalization of roughly $440 billion, as of Friday morning. That was about one-third of bitcoin’s market cap, which was slightly above $1.3 trillion at the time.&nbsp;&nbsp;



Grayscale Investments notched a court victory against the SEC last August in <a href="https://blockworks.co/news/sec-grayscale-spot-bitcoin-etf">a decision that ultimately helped lead to the approval</a> of US spot bitcoin ETFs.  The crypto asset manager had called the SEC’s approval of bitcoin futures ETFs — but not funds that hold BTC directly — a decision that was “arbitrary and capricious.” 



Judges wrote in their decision that the SEC’s “unexplained discounting of the obvious financial and mathematical relationship between the spot and futures markets falls short of the standard for reasoned decision-making.”&nbsp;&nbsp;



Reed and Butler said they don’t believe the futures markets for other crypto assets will show a tight correlation to spot markets that would allow for meaningful market surveillance and deter bad actors.&nbsp;&nbsp;



They added: “The commission is under no obligation to approve such products, and given the risk, it should not do so.”



Still, the SEC <a href="https://blockworks.co/news/ether-futures-etfs-vaneck-proshares-bitwise-offerings">allowed for ETFs that invest in ether futures contracts</a> to start trading in October.&nbsp;



In a <a href="https://www.sec.gov/comments/sr-nysearca-2023-70/srnysearca202370-432799-1074283.pdf">letter</a> supporting an application by Grayscale to convert its Ethereum Trust to an ETF, Coinbase pointed to ETH’s tightness of spreads and price correlation across spot markets.



“The ETH market and [NYSE Arca’s] surveillance-sharing agreement with CME support the position that the exchange’s proposed rule change should be approved for virtually identical reasons articulated by the commission with respect to spot bitcoin [ETPs],” Coinbase wrote.The SEC has <a href="https://blockworks.co/news/sec-delays-blackrock-ether-etf-proposal">delayed its ruling on several proposed ether ETFs</a>, including BlackRock’s application earlier this month. Segment observers expect the agency to decide on such offerings in May.



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Ether ETFs? US senators tell SEC to just say no.

The 10 US spot bitcoin ETFs collectively shattered their daily net inflow record Tuesday as more than $1 billion of investor assets entered the funds. 



BlackRock’s iShares Bitcoin Trust (IBIT) was again <a href="https://blockworks.co/news/blackrock-bitcoin-etf-battle">the category standout</a>, notching an all-time high daily inflow total of $849 million, according to BitMEX Research data.&nbsp;



The Ark 21Shares Bitcoin ETF (ARKB) and the VanEck Bitcoin Trust contributed above-average flows of $93 million and $83 million, respectively.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">[1/4] Bitcoin ETF Flow &#8211; 12 March 2024 All data in. Record day with over $1 billion of net inflow. Blackrock with a record $849 million of inflow <a href="https://t.co/dKFmM3Qvaa">pic.twitter.com/dKFmM3Qvaa</a>&mdash; BitMEX Research (@BitMEXResearch) <a href="https://twitter.com/BitMEXResearch/status/1767807895645634867?ref_src=twsrc%5Etfw">March 13, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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The boost for VanEck’s product comes after the company <a href="https://twitter.com/vaneck_us/status/1767227350108794991">said</a> it would waive its 0.20% sponsor fee on the first $1.5 billion of fund assets until March 31, 2025.



Grayscale Investments’ Bitcoin Trust ETF (GBTC), which has bled more than $11.1 billion in assets since converting to an ETF on Jan. 11, saw just $79 million of outflows Tuesday. That outflow total was down from $494 million the day prior.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-etf-snapshot-inflows-near-high">Bitcoin ETF snapshot: GBTC competitors surpass Grayscale fund in AUM</a>



The $1 billion of net inflows across the 10 bitcoin funds easily surpassed the segment’s previous daily record of $673 million, set on Feb. 28, BitMEX data shows.&nbsp;



The ETF flow spike came as bitcoin’s price has continued its climb, setting multiple new all-time highs over the past eight days.&nbsp;&nbsp;&nbsp;



BTC’s price stood at about $73,300 at 7 a.m. ET on Wednesday — up about 15% from a week ago. The asset’s price had risen above $73,600 a few hours prior, marking a new record.&nbsp;



The assets under management in BlackRock’s IBIT rose above $15 billion at market close Tuesday — behind only GBTC, which has roughly $27.7 billion of assets.



The Fidelity Wise Origin Bitcoin Fund (FBTC) is the group’s third-largest fund, managing about $9.2 billion in assets.&nbsp;&nbsp;



Tuesday marked the second-best trading volume day for the 10 US spot bitcoin ETFs, according to Bloomberg Intelligence <a href="https://twitter.com/EricBalchunas/status/1767657812920766486">data</a> — as investors traded roughly $8.5 billion worth of the funds’ shares.&nbsp;



IBIT’s trading volumes on Tuesday represented nearly half of those across the segment, at about $4 billion.



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Bitcoin price rally sparks record ETF inflows of over $1B

As bitcoin ETF trading volumes ascended to new levels last week, inflows did the same — then reversed course.&nbsp;



Net inflows into the segment of 10 US funds turned negative on Friday as BlackRock’s fast-growing ETF was unable to fully offset the assets bleeding out of Grayscale Investments’ offering.



BlackRock’s iShares Bitcoin ETF (IBIT) tallied inflows of about $203 million on Friday, according to BitMEX Research data.&nbsp;



Three other such funds — the Fidelity Wise Origin Bitcoin Fund (FBTC), the Bitwise Bitcoin ETF (BITB) and the Ark 21Shares Bitcoin ETF (ARKB) — contributed combined net inflows of roughly $150 million.&nbsp;



But net outflows from the Grayscale Bitcoin ETF Trust (GBTC) — a fund priced significantly higher than competitors at 1.5% — amounted to $492 million on Friday, pushing the segment’s flows negative for the day.



Read more: <a href="https://blockworks.co/news/bitcoin-etf-net-inflows-positive">Bitcoin ETF net inflows stay positive despite GBTC $600M exodus</a>



Net outflows were $140 million Friday, marking just the eighth day of negative flows for the 10 funds in 35 trading days. The BitMEX Research data excluded flows from WisdomTree’s bitcoin fund — an ETF that has failed to see material flows following its first week of trading.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">[1/4] Bitcoin ETF Flow &#8211; 01 March 2024 Almost all data in, just missing Invesco $139.5m net outflow on 1st March, due to large $492m GBTC outflow <a href="https://t.co/6dSkQ8ZNNG">pic.twitter.com/6dSkQ8ZNNG</a>&mdash; BitMEX Research (@BitMEXResearch) <a href="https://twitter.com/BitMEXResearch/status/1763863079421403543?ref_src=twsrc%5Etfw">March 2, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Still, the Friday outflows came during a week in which the fund category saw its <a href="https://blockworks.co/news/bitcoin-etf-inflows-new-peak">highest single day of net inflows</a> — amounting to $673 million on Feb. 28.



The category enjoyed about $1.7 billion of net inflows last week — second only to <a href="https://blockworks.co/news/bitcoin-etf-volumes-spike">the week spanning Feb. 12 to Feb. 16</a>, during which that number eclipsed $2.2 billion.&nbsp;



Industry watchers have closely tracked net flows into the US bitcoin products to get a sense of BTC demand from investors who previously did not have easy access to the asset. The Securities and Exchange Commission changed its years-long stance by <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">allowing such products to come to market</a> in January.&nbsp;&nbsp;



Net inflows for the 10 offerings stands at nearly $7.4 billion to date despite GBTC weighing down that total with net outflows of about $8.9 billion.&nbsp;&nbsp;&nbsp;



<h2 class="wp-block-heading">Heightened trading volumes, the new normal?</h2>



In terms of bitcoin ETF trading volumes, last week was by far a record.&nbsp;



The trading volumes total for the 10 offerings was roughly $22 billion, Bloomberg Intelligence analyst Eric Balchunas said in a Friday X <a href="https://twitter.com/EricBalchunas/status/1763688112457203956">post</a>.&nbsp;



Trade volumes <a href="https://blockworks.co/news/bitcoin-etf-7b-record-volume">hit an all-time high of more than $7.6 billion</a> on Feb. 28, as Thursday and Friday reflected the second- and third-best totals, respectively.



IBIT’s trading volumes exceeded $1 billion during all five days last week, peaking at about $3.3 billion on Wednesday.&nbsp;



“Will this subside or is [the] new normal here?” Balchunas said. “We&#8217;ll know next [week].”



Read more: <a href="https://blockworks.co/news/bitcoin-etfs-btc-supply">Bitcoin ETFs now hold nearly 4% of all bitcoin — and they’re not slowing down</a>



Beyond just the US bitcoin funds, crypto investment products as a whole reached more than $30 billion last week, according to CoinShares data.&nbsp;



This was, at times, the equivalent of half of global bitcoin daily trading volumes on trusted exchanges, CoinShares research head James Butterfill wrote in a Monday blog <a href="https://blog.coinshares.com/volume-172-digital-asset-fund-flows-weekly-report-6e6506a5c274">post</a>.



Ethereum-focused products saw about $85 million of net inflows last week — its largest weekly total since July 2022.



Bitcoin’s price hovered around $65,000 at 7:30 a.m. ET Monday — up 27% from a week ago. ETH was at about $3,500, a nearly 15% rise over the past seven days.&nbsp;



Crypto products’ assets under management stood at nearly $83 billion, Butterfill noted — just short of the $86 billion high set in November 2021.



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Bitcoin ETF snapshot: Record volumes lead to second-best weekly inflows

Europe-focused CoinShares is set to take over the fund division of Valkyrie Investments as part of an expansion following the landmark approval of US spot bitcoin ETFs.&nbsp;



Valkyrie’s spot bitcoin fund was among 10 such ETFs that began trading Thursday — the first investment products of that type cleared by the Securities and Exchange Commission.



Now, crypto-focused investment firm CoinShares has exercised its option to acquire Valkyrie Funds as a direct result of that SEC approval, the company said in a Friday news release.



The move aims at extending the company’s European success in the US, CoinShares CEO Jean-Marie Mognetti said in a statement. CoinShares products hold roughly 40% of the assets in all European crypto exchange-traded products (ETPs), according to the firm.&nbsp;&nbsp;&nbsp;



“This expansion is a clear statement of our appetite for acquisition to support our ambition to be a global leader in the digital asset space,” Mognetti added.



CoinShares said it <a href="https://blockworks.co/news/coinshares-potential-buy-valkyrie">had secured an option to buy Valkyrie</a> in November. That option was active until March 31, 2024.



Read more: <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">SEC officially approves spot bitcoin ETFs in landmark decision</a>



Bloomberg Intelligence analyst James Seyffart said in an X <a href="https://twitter.com/JSeyff/status/1725171535290241520?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1725171535290241520%7Ctwgr%5E38dcb1bb63a2cc08307e3379488ae07e99f05a60%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fblockworks.co%2Fnews%2Fcoinshares-potential-buy-valkyrie">post</a> at the time that the deal “would bring CoinShares into the US with a splash.”&nbsp;&nbsp;



The Valkyrie Bitcoin Fund (BRRR) saw day-one trading volumes of roughly 675,000 shares, or $9 million, according to Yahoo Finance data — <a href="https://blockworks.co/news/day-1-bitcoin-etf-trading-volume">significantly lower than a number of competing products</a>.



In addition to BRRR, Valkyrie has a bitcoin miners fund and another ETF that holds futures contracts of bitcoin and ether. The three funds have about $110 million in assets under management, which will be added to CoinShares’ roughly $4.5 billion in assets.&nbsp;



“Being part of such a strong and successful group marks a promising new chapter for us,&#8221; Valkyrie Funds CEO Leah Wald said in a statement.&nbsp;



The deal, for which specific terms were not disclosed, is pending legal requirements and board approval.



A CoinShares spokesperson did not immediately return a request for comment.



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CoinShares to take over Valkyrie now that spot bitcoin ETF is live

Katherine Ross

After the Securities and Exchange Commission’s milestone decision to approve spot bitcoin ETFs Wednesday, industry executives and analysts agree such products are set to open up the segment to more investors.&nbsp;



The regulator cleared such proposals by BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Valkyrie, Invesco, WisdomTree, Franklin Templeton and Hashdex, as well as one by Ark Invest and 21Shares, according to a Wednesday <a href="https://www.sec.gov/files/rules/sro/nysearca/2024/34-99306.pdf">filing</a>.



The funds are expected to list in short order, with BlackRock, Grayscale and Fidelity saying in statements they intend for their funds to start trading Thursday.&nbsp;&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">SEC officially approves spot bitcoin ETFs in landmark decision</a>



<h2 class="wp-block-heading">Fund issuer executives react&nbsp;</h2>



Dominik Rohe, head of the Americas for BlackRock’s iShares ETF business, said in a Wednesday statement that through the iShares Bitcoin Trust (IBIT), “investors can access bitcoin in a cost-effective and convenient way.”



Bitwise Chief Investment Officer Matt Hougan said in an X <a href="https://twitter.com/Matt_Hougan/status/1745196965191729614">post</a>: “We’re so back.”&nbsp;



“We were and remain excited at the prospect of democratizing access to this asset through a U.S. regulated investment vehicle,” Grayscale CEO Michael Sonnenshein said in a statement.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">when is NOW. Excited about <a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$GBTC</a>? Visit <a href="https://t.co/D6oVsL3CHi">https://t.co/D6oVsL3CHi</a> for details and disclosures. <a href="https://t.co/YMS3HgHuZy">pic.twitter.com/YMS3HgHuZy</a>&mdash; Sonnenshein (@Sonnenshein) <a href="https://twitter.com/Sonnenshein/status/1745186745748971598?ref_src=twsrc%5Etfw">January 10, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Cynthia Lo Bessette, head of digital asset management at Fidelity, said in a statement the firm has long believed a spot bitcoin ETF would be an efficient way to gain exposure to the asset.&nbsp;



“Fidelity has engaged in constructive dialogue with the SEC for years, and the affirmation of this approval signals positive momentum for the industry, and increased choice for investors who want to engage with digital assets,” she added.&nbsp;



Roger Bayston, head of digital assets at Franklin Templeton, told Blockworks he was “encouraged” by the SEC’s decision. He noted that the ruling gives US investors a simpler means of allocating to crypto.&nbsp;



&#8220;We feel that we are well positioned as a firm to leverage our in-depth knowledge of blockchain ecosystems to introduce products like the Franklin Bitcoin ETF (EZBC) that serve to further the understanding and accessibility of digital assets within the broader investing community,&#8221; Bayston said.



Valkyrie CEO Leah Wald told Blockworks the firm is “locked and loaded.”



“There&#8217;s still a lot that I think we&#8217;re testing out,” she said when speaking about the possibility of starting to trade Thursday. “I&#8217;m not sure about the other issuers but Valkyrie is meticulous in ensuring our trading operations and every part of operations is seamless.”



<h2 class="wp-block-heading">Industry watchers weigh the significance</h2>



Segment observers and executives predict that the approval of spot bitcoin ETFs is likely to bring a flood of flows into the crypto market from traditional asset allocators.



Spencer Hallarn, head of OTC trading at liquidity provider GSR, said while short-term volatility around the announcement is expected, the approval opens up the crypto space to large pools of capital previously “walled off.”



“While on an individual level BTC and crypto has been quite accessible for years, getting exposure in an institutional construct without the prohibitive roll costs of futures-based products that can be custodied alongside the entirety of folks&#8217; portfolios is important and represents a major step forward for the space,” Hallarn added.



ETFs, or exchange-traded funds, are vehicles widely used by retail and institutional investors alike. There are nearly 2,000 ETFs trading in the US with combined assets under management of roughly $6.4 trillion, according to ETF.com.



A June <a href="https://engage.financialplanningassociation.org/2023-investing-trends">survey</a> by the Journal of Financial Planning and the Financial Planning Association found that more than 90% of advisers use or recommend ETFs. Nearly 90% of financial advisers interested in buying BTC said they were waiting until a US spot bitcoin ETF is offered, <a href="https://blockworks.co/news/financial-advisers-evaluate-etf-approval">according to a recent survey by Bitwise and VettaFi</a>.&nbsp;



Steven Schoenfeld, CEO of MarketVector Indexes, said he believes family offices, wealth managers, and small institutions who have not yet allocated to BTC are likely to take comfort in the ETF structure. He noted US financial advisers manage more than $30 trillion in assets.



“If just 1% of this amount were allocated to a Bitcoin ETF, it would ultimately translate to $300 billion invested in bitcoin,” Schoenfeld noted. “This substantial influx of capital could significantly impact bitcoin&#8217;s market cap, liquidity, and overall stability.”&nbsp;



<h2 class="wp-block-heading">Price impact?</h2>



LMAX Group market strategist Joel Kruger <a href="https://blockworks.co/news/bitcoin-rallied-whats-next">said in December</a> the potential approval of spot bitcoin ETFs could be “a rare buy the rumor, buy the fact event.” He noted an approval could trigger a rally amount to 10% or 15%, fueled by sidelined capital.



The price of bitcoin was at roughly $46,450, as of 5:30 pm ET — up about 1.2% from an hour prior. Galaxy Digital research associate Charles Yu wrote in an October report that the price of bitcoin could increase by 74% in the 12 months following approval. This stemmed, in part, from his flow estimate into such funds: $14.4 billion in the first year of trading.



Read more: <a href="https://blockworks.co/news/bitcoin-spot-etf-analysts-gold#">To gauge impact of bitcoin spot ETF, analysts look to gold</a>&nbsp;



“The ripple effects of a spot bitcoin ETF could lead to a recalibration of market dynamics, aligning them closer to traditional financial markets, yet retaining the distinct characteristics of the crypto world,” Sheila Warren, the CEO of Crypto Council for Innovation.



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