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First Negative Day for Bitcoin ETFs

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Bitcoin ETFs face their first setback, as a significant shift in money flows is observed, marking the first time a negative trend has been experienced since their launch on January 11. This dynamic was primarily driven by outflows from Grayscale’s GBTC, which maintains a trend of significant exits.

Data collected by analyst James Seyffart of Bloomberg Intelligence reveals that the ten Bitcoin ETFs (including GBTC) experienced a net outflow of $158 million last Wednesday. It’s essential to note that daily flows can be volatile, and for a more comprehensive perspective, the total sum of Bitcoin held by all ETFs was around 649,000 units as of January 24, compared to over 660,000 a week earlier, representing a decline of approximately 11,000 tokens.

Within this landscape, the only fund that recorded net negative flows during the week was GBTC, witnessing a reduction in total BTC in its custody from 592,098 to 523,516 units. This pullback in GBTC holdings stands out amidst a scenario where nine other funds, led by BlackRock’s IBIT and Fidelity’s FBTC, are showing a more robust performance.

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BlackRock and Fidelity Lead the Bitcoin ETF Market

In particular, BlackRock’s IBIT and Fidelity’s FBTC emerge as leaders among the remaining nine funds. As of January 24, each of them holds over 40,000 Bitcoin, compared to the 20,000-25,000 units they had just a week ago. In addition to their solid holdings, both funds are approaching the $2 billion mark in assets under management.

Despite their leadership position, there has been a slowdown in inflows for both funds in recent days. BlackRock, for example, added only 1,663 tokens on January 24, marking its weakest daily addition since opening for business and a decrease from the 8,705 added on January 17.

Despite this recent deceleration, net flows since the launch of the ten Bitcoin ETFs on January 11 remain significant. Eric Balchunas, Seyffart’s colleague at Bloomberg, calculates total money flows of $824 million since the launch, translating into a net addition of approximately 17,000-20,000 Bitcoin. This figure highlights that, despite recent volatility, demand and interest in these investment instruments continue to be substantial.

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