Bitcoin Exchange-Traded Funds (ETFs) have witnessed a substantial increase in money flowing in, reaching a significant milestone of $2 billion. This surge is a clear indication of the growing interest and confidence that investors have in the cryptocurrency market, particularly in Bitcoin.
One notable player in driving this influx of investment into BTC ETFs is BlackRock, the world’s largest asset manager. Their involvement highlights the increasing acceptance and adoption of cryptocurrencies within the traditional financial sector.
The advent of BTC ETFs offers investors a regulated and accessible avenue to gain exposure to Bitcoin’s price movements without the need to directly hold or trade the digital asset itself. This development marks a significant step forward in integrating cryptocurrencies into traditional investment portfolios, attracting both institutional and retail investors.
Currently, the ETFs hold $13.48 billion worth of coins based on a price of $52,100 per coin. This amount is $2.08 billion more than the total value invested in these funds to date. In the past five weeks, these bitcoin-backed funds have received a total of $11.4 billion in capital inflows, excluding the Grayscale Bitcoin Trust.
The cash received by these funds was used by their respective issuers, a group led by BlackRock, Fidelity, Ark, 21Shares, and Bitwise, to purchase bitcoin on behalf of the ETF shareholders.
IBIT, with the largest assets under management (AUM) at 115,991 BTC ($6.04 billion) based on $5.17 billion in inflows, has achieved a price appreciation of over $870 million, or 17%. On the other hand, BTCO shareholders of Invesco-Galaxy have also seen significant gains, albeit on a smaller scale.
Other funds like Valkyrie, Fidelity, and VanEck have outperformed BlackRock by approximately 20%. These divergences in unrealized gains among the various funds indicate unique purchasing patterns exhibited by different groups of investors.
For example, analyzing BlackRock inflows against the price of BTC reveals that investors have consistently allocated their investments to IBIT over time. This strategy has resulted in diminished unrealized profits compared to BTCO, the fund managed by Invesco-Galaxy.
In contrast, BTCO received two-thirds of its year-to-date inflows in just four days (16-19 January) when bitcoin experienced a significant decline. Bitcoin’s subsequent increase of approximately 33% has propelled BTCO and its shareholders into positive territory.
Interestingly, some investors have taken it a step further by withdrawing their profits, making BTCO the only bitcoin ETF since its launch to register outflows, excluding GBTC. Between February 9 and 14, investors withdrew over 1,500 BTC ($78.1 million) from Invesco-Galaxy’s fund, equivalent to about 20% of the fund’s treasury at that time. During this period, the price of bitcoin increased from below $45,500 to $50,000.
While BTCW from WisdomTree slightly lags behind, most of its inflows were generated on its first day of trading, well before the decline in bitcoin.
Grayscale’s premier fund, which is now an ETF itself, has seen an average daily loss of nearly 2,400 BTC ($124.9 million) this month. The total value of bitcoin withdrawn from GBTC since January 11 amounts to $6.86 billion. If that capital had not re-entered the market immediately, the same amount of bitcoin (162,259 BTC) would now be worth $8.44 billion, representing potential unrealized gains of 23%.
As of the time of writing, the current value of Bitcoin (BTC) is $51,964.70, reflecting a 0.1% increase from yesterday and a 0.0% increase from an hour ago. Bitcoin’s present value is 9.7% higher than its value seven days ago. The total volume of Bitcoin traded in the last 24 hours was $25,460,236,920.
According to Binance, the live price of Bitcoin ETF is $0.000633 per ETF (ETF/USD), with a current market capitalization of $0.00 USD. The 24-hour trading volume is $35,629.73 USD. Bitcoin ETF has experienced a loss of -31.30% in the past 24 hours and has no circulating supply.
