After experiencing several weeks of continuous large net inflows, the frenzy surrounding Bitcoin spot ETFs seems to have subsided, with a net outflow of 1,766 bitcoins last week. However, Bloomberg ETF analyst James Seyffart stated that any type of ETF would go through a period of lack of capital inflows, which is not uncommon.
According to Lookonchain data, after reducing holdings by 381 bitcoins earlier this week, 9 Bitcoin spot ETFs reduced holdings by an additional 1,299 bitcoins on the 16th, resulting in a net outflow of approximately $81.44 million. Among them, Grayscale had the largest reduction, with a net outflow of around $158.21 million, reducing holdings to 311,621 bitcoins, worth about $19.53 billion.
It is worth noting that the initial frenzy surrounding Bitcoin spot ETFs seems to have faded, with other ETFs unable to keep up with the rapid outflow from Grayscale’s GBTC, resulting in a net outflow of 1,766 bitcoins in the past week, according to CoinDesk’s report.
Looking closer, on Friday and Monday of last week, Fidelity’s FBTC had zero inflows, breaking the record of daily inflows since its launch on January 11, making BlackRock’s IBIT the only product that continues to receive daily inflows since the listing of Bitcoin spot ETFs.
For most other Bitcoin spot ETFs, such as Invesco and Galaxy Digital’s BTCO, VanEck’s HODL, and Valkyrie’s BRRR, zero inflows or occasional outflows have become the norm.
In response, Bloomberg ETF analyst James Seyffart believes that this is not surprising. For example, there are 3,500 ETFs in the US market, but about 83% of ETFs had no capital inflows on Monday. James Seyffart explained that the creation and redemption of ETF shares only occur when the supply and demand mismatch is significant and the cost is lower than hedging. In the case of Bitcoin ETFs, the creation unit ranges from 5,000 shares to 50,000 shares. If the mismatch is small, market makers will handle ETF share transactions like stocks.
James Seyffart also does not believe that Grayscale’s GBTC outflow will reverse, as the management fee of GBTC is 1.5% (higher than its competitors). He would be surprised if GBTC experiences a net inflow one day.
Although inflows into Bitcoin spot ETFs have slowed down recently, Samir Kerbage, Investment Manager at Hashdex, who converted Bitcoin futures funds into Bitcoin spot ETFs in March, believes that inflows into Bitcoin spot ETFs will reappear.
Related report: Hong Kong Securities and Futures Commission is rumored to approve the listing of Bitcoin spot ETFs “before the end of April”, and the first batch of listings will be announced next week. Bitcoin spot ETFs have already captured over 4% of BTC circulation, and a centralized crisis is imminent. Michael Saylor: Bitcoin spot ETFs are competing with the S&P 500 and will soon surpass gold.