As a seasoned researcher who has witnessed the evolution of digital assets and their traditional counterparts, I must admit that the surge in Bitcoin ETFs is nothing short of remarkable. The numbers speak for themselves; $21 billion in inflows within just 10 months is a testament to the growing interest and confidence in Bitcoin as an investment option.
In just under a year since their debut, Bitcoin ETFs focused on spots have experienced extraordinary expansion, igniting investor curiosity and appetite for the leading digital currency.
According to a study by Binance Research, the research division of a well-known global cryptocurrency exchange, it was found that Bitcoin Exchange Traded Funds (ETFs) have amassed more than 938,000 Bitcoins, worth approximately $63.3 billion. This total represents about 4.5% of the entire circulating supply of Bitcoin. When you factor in additional holdings from similar funds, the total rises to around 1.1 million Bitcoins, or roughly 5.2% of the overall circulating supply.
Significantly, a substantial portion of the money managed by these funds was gathered during their early stages, specifically within the initial months after launch. The report, on the other hand, highlighted that investors’ interest in these funds has persisted consistently throughout the year, as evidenced by steady inflows.
Bitcoin ETFs Attract $18.9B Inflows
Over the last several months, interest in Bitcoin has grown significantly due to the introduction of Exchange Traded Funds (ETFs) focused on Bitcoin. Consequently, these funds have been withdrawing approximately 1,100 Bitcoins each day from the market.
Furthermore, it’s worth noting that these funds have experienced inflows in 60% of the weeks (specifically 24 out of 40), with the total amount of inflows significantly surpassing outflows. Over the course of the past ten months, Bitcoin ETFs have collectively received inflows amounting to more than $21 billion.
According to the data, the investment flow into the Bitcoin ETF has outperformed the initial growth of the first Gold ETF, which now manages assets worth approximately $130.9 billion. The Gold ETF was seen as a significant achievement when it attracted $1.5 billion in investments during its first year after launching in 2005. However, the Bitcoin ETF has significantly surpassed this milestone, accumulating over $21 billion in just ten months.
Approximately 84% of the entire Exchange-Traded Fund (ETF) market is controlled by BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC. The majority of the total net ETF inflows up to this point have come from investments into IBIT.
Retail Investors Drive Demand
It was highlighted in the report that individual investors make up approximately 80% of the interest in Bitcoin ETFs. Although institutional demand is currently less, it has experienced steady growth over the last few months, increasing by 7.9% from the first quarter onwards.
The number of institutional investors has also increased, currently at over 1,200. Top institutional holders include investment advisors and hedge funds, as well as major banks and pension funds like Goldman Sachs, Morgan Stanley, and the State of Wisconsin Investment Board.
The interest among institutions in Bitcoin Exchange Traded Funds (ETFs) is likely to grow over the next few years, as investors become more accustomed to digital assets. This trend is particularly noticeable because Bitcoin’s relationship with the S&P 500 has been growing stronger since early 2024, suggesting a shift in investor perception of Bitcoin as a secure investment option.
Regrettably, Bitcoin ETFs have seen significant growth, but Ethereum-based ETFs have largely been overlooked. These funds have experienced a total of $103.1 million in withdrawals, with 8 out of 11 weeks since their launch seeing negative inflows.
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2024-10-27 22:18