As a seasoned crypto investor with a decade of experience under my belt, I’ve witnessed the rollercoaster ride that is the digital currency market. The recent influx of institutional investments into Bitcoin Exchange-Traded Funds (ETFs) like BlackRock’s IBIT and Bitwise’s BITB has been nothing short of intriguing.
Despite Bitcoin‘s recent dip to $67,500 from its weekly high of $69,000, BlackRock’s IBIT exchange-traded fund (ETF) has persisted in receiving substantial daily investments. This is happening amid a 1.3% volatility over the past 24 hours, with a market capitalization of approximately $1.34 trillion and a 24-hour trading volume of $35.41 billion.
As an analyst, I observed on October 24th that institutional investors collectively poured over $165 million into the crypto investment product, IBIT. This significant investment positions IBIT as a top choice within an unpredictable market. Data from SoSoValue underscores this trend, indicating that IBIT now boasts a total net inflow of approximately $23.69 billion, surpassing competitors like Grayscale’s GBTC and Fidelity’s FBTC in terms of growth.
Grayscale’s GBTC Records Another Daily Outflow
On the 24th of October, the combined inflow into all Bitcoin Exchange-Traded Funds listed in the U.S. was approximately $200 million. Almost 90% of this amount can be attributed to BlackRock’s IBIT.
Among all the available Bitcoin ETFs, Bitwise’s Bitcoin ETF (BITB) and Grayscale’s Bitcoin Trust (GBTC) were the preferred picks for institutional investors, with BITB receiving approximately $29.63 million in investments. The other nine ETFs saw no significant movements, neither inflows nor outflows.
According to SoSoValue data, GBTC was the sole Bitcoin ETF experiencing withdrawals as of October 24, with investors taking out more than $7 million in a day. The fund’s daily net investment currently amounts to $20.11 billion, having faced substantial outflows throughout October.
Regardless, GBTC continues to be a significant income source, outshining competitors such as BlackRock’s IBIT. As per the latest reports, Grayscale’s Bitcoin Trust manages roughly $14 billion in assets and generates approximately $205 million in yearly earnings, thanks to its 1.5% fee structure.
BlackRock’s IBIT fund manages an amount of $17 billion, but generates an annual income of $42.5 million. This is due to a management fee of 0.25%. Interestingly, this lower fee makes GBTC, despite recent trends towards cheaper ETF alternatives, five times more profitable than IBIT.
Bitcoin ETFs See Massive Institutional Adoption
Although cryptocurrency performance varies, the interest among institutions for investing in crypto products continues to grow. This week, Eric Balchunas, a senior ETF analyst at Bloomberg, disclosed that European investors have poured over $105 billion into U.S.-listed Bitcoin ETFs.
European investors show a strong affection towards America, with the inflow of funds into U.S.-focused ETFs reaching an all-time high of $105 billion this year. Given that the S&P 500 (SPY) has risen by 24% compared to Europe’s 10%, it comes as no surprise that investors are drawn to these returns. Even Asia is seeing record inflows into American markets, as reported by @psarofagis.
— Eric Balchunas (@EricBalchunas) October 21, 2024
As a crypto investor, I’ve been closely following the market trends, and it’s fascinating to note that Binance, the world-renowned crypto exchange with more than 200 million users globally, has reported an unprecedented surge in institutional interest in our beloved crypto products. In fact, this level of interest surpassed that of early Gold ETFs during their first year on the market. This is a clear indication of the growing recognition and acceptance of cryptocurrencies by institutions, which could lead to significant growth in the future.
At present, over 120 global financial institutions have invested in this product, whereas Gold ETFs managed to attract just 95 investors during the same timeframe.
Besides the widespread acceptance by institutions, Bitcoin ETFs have hit significant achievements since their launch. On October 17, Balchunas revealed on X that these products surpassed $20 billion in total net inflows, a metric he called “the hardest one for ETFs to increase.” He also mentioned that this milestone was reached over five years after Gold-based ETFs achieved it.
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2024-10-25 12:17