As a researcher with extensive experience in the cryptocurrency market and specifically in Bitcoin Exchange-Traded Funds (ETFs), I find BlackRock’s iShares Bitcoin Trust (IBIT) halting inflows for several consecutive days to be an intriguing development. The sudden halt comes after IBIT recorded consistent daily inflows for 71 days, making it the fastest-growing spot Bitcoin ETF in the United States.
There’s growing uneasiness within the Bitcoin community as BlackRock’s Bitcoin spot ETF has halted inflows continuously for several days since its debut.
Since April 24, the BlackRock iShares Bitcoin Trust (IBIT) – the quickest expanding Bitcoin ETF in the US – has failed to attract any new investments.
Based on information from IBIT’s official website, the fund has kept a consistent 274,462 Bitcoin holdings throughout the last four business days.
BlackRock’s IBIT broke its 71-day streak of daily inflows on April 24, raising some concerns since the fund had been consistently gaining new investments. When it began trading on January 11, IBIT held only 2,621 Bitcoin. Over the following months, its Bitcoin holdings expanded significantly, with an increase of up to 10,378%.
As a crypto investor, I’ve noticed some concerns being raised in the community regarding IBIT’s halted inflows. Some believe this isn’t a positive sign for investors. However, it’s important to note that BlackRock’s 71-day inflow streak is what truly stands out in this context. This means that BlackRock has consistently been adding funds to crypto investments for over two months, while IBIT has seen no inflows for the past four days.
As an analyst, I would explain it this way: To facilitate the entry or exit of new Bitcoins in a Bitcoin ETF, there must be a significant disparity between the supply and demand in the market. Market makers are then required to coordinate the generation or redemption of creation units to address this imbalance.
“This isn’t unique to the Bitcoin ETFs, this is how ETFs work in general. Most ETFs on most days, will record zero inflows. Blackrock’s trend of positive flows has been an exception to this rule.”
During this no-new-investment phase at BlackRock, notable competitors such as market leader Grayscale Investments continue experiencing withdrawals in their Bitcoin exchange-traded funds (ETFs).
Based on information from HODL Capital, a total of 823 Bitcoin were withdrawn daily from the 10 US-listed spot Bitcoin ETFs on April 20th. Meanwhile, the Grayscale Bitcoin Trust ETF (GBTC) owned approximately 297,117 BTC as of that date, representing a decrease of roughly 52% compared to its initial holdings on January 11th.
Versus BlackRock’s 274,462 BTC, Grayscale’s GBTC currently holds only around 8% more.
As a researcher studying Bitcoin Exchange-Traded Funds (ETFs) in the United States, I’ve observed a recent decrease in daily inflows. However, the total holdings of these funds remain in a positive growth phase. The current BTC ETF holding volume was approximately 831,424 Bitcoins as of April 29, marking a nearly 33.1% increase since the beginning of the year on January 11.
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2024-04-30 17:13