US Bitcoin ETFs Post Longest Run of Inflows as Token Nears Record

(Bloomberg) — U.S. exchange-traded funds investing directly in Bitcoin posted an unprecedented 18th consecutive day of net inflows; This increase in demand helped the largest digital asset rise to a record high.

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Net subscriptions for the group of nearly a dozen products stood at $15.6 billion through Thursday after the Jan. 11 launch, with total assets reaching $62.3 billion, according to data compiled by Bloomberg.

BlackRock Inc. and Fidelity Investments are among some of the most successful startups in the history of the ETF industry. They took Wall Street by storm, shifting the center of gravity of cryptocurrency from Asia to the United States.

Many speculators in the options market are predicting that Bitcoin will surpass March’s all-time high of $73,798 this month; This is aided by ETF demand and expectations that the Federal Reserve will continue to cut interest rates.

“There has been massive inflows into spot Bitcoin ETFs,” Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, wrote in a note. “With economic growth slowing to a recession-free pace and signs of declining inflation continuing, macro continues to trend in favor of cryptocurrency.”

Last week, BlackRock’s $21.4 billion iShares Bitcoin Trust surpassed Grayscale Investments LLC’s $20.1 billion Bitcoin trust to become the world’s largest token fund. Fidelity Wise Origin Bitcoin Fund with $12.3 billion ranks third.

SEC Pivot

The U.S. Securities and Exchange Commission reluctantly allowed spot Bitcoin ETFs in January following a court ruling in 2023. The institution also surprisingly moved towards funding approval for the No. 2 token, Ether, in May.

The SEC, chaired by Chairman Gary Gensler, has been critical of allegations that the digital asset industry is not compliant with regulations. Congress’ efforts to bring legal clarity to crypto have gained momentum recently.

Ophelia Snyder, president of crypto ETF provider 21 Shares AG, said the adoption of digital asset funds is still in its infancy for institutions and brokers. “The market still has a long way to go, and we’re still in a pretty early stage,” he said on an episode of Bloomberg’s Tiger Money podcast airing Tuesday.

Bitcoin has more than quadrupled since the beginning of last year. That volatility has dulled memories of the painful bear market in 2022 that exposed scams and led to once-admired entrepreneurs like Sam Bankman-Fried being jailed.

The story continues

Bitcoin remained steady at around $71,100 as of 12:35 a.m. on Friday in Singapore, while Ether was little changed at $3,810.

–With help from Rebecca Sin and David Ingles.

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