The State of US Spot Bitcoin ETFs: A Critical Analysis

The State of US Spot Bitcoin ETFs: A Critical Analysis

The US spot Bitcoin ETFs are showing signs of slow recovery, with collective inflows reaching $21.52 million on June 26th. This positive momentum follows a recent uptick in activity that began on Tuesday. However, BlackRock’s iShares Bitcoin Trust (IBIT) has not reported any new investments in the past four days, signaling a potential cooling off period for the fund.

BlackRock’s activity with IBIT has been on a downtrend, with only two minor inflows recorded since June 14, both of which were under $2 million. This lack of new investments can be concerning, especially considering that zero flows in an ETF indicate a balance between supply and demand, leading to no share adjustments. According to Bloomberg ETF analyst James Seyffart, this lack of significant inflows does not necessarily mean that there is no trading activity, but rather that the net flow isn’t substantial enough to warrant share adjustments.

Other spot Bitcoin ETFs, such as BITB by Bitwise, BTCO by Invesco and Galaxy Digital, and BRRR by Valkyrie offerings, also experienced a similar fate of zero flows on the same day. This collective lack of activity may indicate a broader trend in the market that is affecting multiple investment vehicles simultaneously.

Contrastingly, Fidelity’s FBTC saw the largest net inflows of the day, amounting to $19 million according to SoSoValue data. This reversal of trend is noteworthy, considering that the fund saw a continuous 7-day streak of outflows from June 13 to 24. The surge in inflows for FBTC signals a shift in investor sentiment towards spot Bitcoin ETFs, breaking away from the previous negative streak on June 26.

Grayscale’s GBTC, which had not seen positive flows since June 5, attracted just over $4 million in inflows yesterday. This renewed interest in GBTC is a positive sign for the market, especially considering that since their introduction in January, spot Bitcoin ETFs have attracted a total of $14.44 billion in net inflows. Investors seem to be regaining confidence in these investment vehicles, as evidenced by the recent uptick in activity across various funds.

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