Bitcoin ETFs Absorb $520 Million Amid Record Low Grayscale Outflows

Bitcoin ETFs Experience Surge After Price Rally

Bitcoin spot ETFs witnessed a resurgence on Monday, with Bitcoin’s price surging to $57,000 for the first time since November 2021. Data from BitMEX Research revealed that Bitcoin ETFs saw $520 million in daily net inflows, marking one of their top five best-performing days since their launch on January 11. In total, these ETFs have absorbed a substantial $6 billion in BTC.

Grayscale Bitcoin Trust (GBTC) in Focus

The surge in Bitcoin ETFs includes flows related to the Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin fund which transitioned into an ETF in January. Despite the fund’s high fee structure leading to continuous outflows in favor of cheaper competitors, the daily outflow reached a record low of just $22.4 million.

The European Central Bank’s dismissal of Bitcoin’s value and its remarks labeling the rally following ETF approvals as a “dead cat bounce” precede this event by less than a week. Over the past 47 days, Grayscale has experienced $7.4 billion in outflows, while competing funds from BlackRock, Fidelity, and others have absorbed $13.4 billion. In total, ETFs now hold over 723,000 BTC, valued at $41.2 billion at today’s price.

Record Trading Volume for BlackRock

The newly launched Bitcoin ETFs, excluding Grayscale, garnered impressive flows on Monday, with record daily volume amounting to $2.4 billion. This figure includes an astonishing $1.3 billion for BlackRock’s ETF alone, placing BlackRock’s ETF among the top 11 ETFs by volume in the entire country.

While “flows” pertain to the amount of Bitcoin gained or lost by the fund, “volume” refers to the amount traded, whether it’s being bought or sold. Ethereum analyst Eric Balchunas expressed his uncertainty regarding the reason behind this increased activity, suggesting that price rally could be generating heightened interest in these ETFs.

The correlation between Bitcoin’s price action and inflows to Bitcoin ETFs has become apparent. For instance, in January, Bitcoin’s price dropped from $49,000 to $39,000 as Grayscale investors sold $500 million in BTC per day for several consecutive days. Conversely, the price surged back above $50,000 earlier this month as GBTC sales slowed down and Bitcoin ETFs began absorbing approximately $500 million per day in net flows.

There are speculations among analysts that Bitcoin ETFs could potentially impact Coinbase’s profitability by overtaking the firm as the nation’s most popular Bitcoin trading venue.