Since the introduction of spot exchange-traded funds (ETFs) in the United States in January, Bitcoin‘s price has witnessed a remarkable surge, more than doubling within this period. The influx of demand from these regulated investment vehicles has driven the original cryptocurrency to achieve new historic highs, fueled by a surge in Bitcoin acquisitions. However, recent data from Kaiko Research suggests a possible overestimation of market sentiment, as investors swiftly divested from crypto ETFs at an accelerated rate in the past week.
In early April, both ETF inflows and the momentum of Bitcoin’s rally began to decelerate. Notably, BlackRock’s iShares Bitcoin Trust (IBIT) experienced its first daily outflow of $37 million, breaking a streak of 71 consecutive days of inflows. However, a reversal was observed on Friday, with robust inflows recorded across various ETFs, including Grayscale’s GBTC. Moreover, BlackRock’s IBIT fund is now approaching parity with GBTC in terms of holdings. Analysts at Kaiko attribute this resurgence in ETF inflows to speculation surrounding potential interest rate cuts by the Federal Reserve, triggered by U.S. jobs data.
Meanwhile, the competition among ETFs is intensifying on a global scale. Three mainland Chinese asset managers—Bosera Asset Management, Harvest Global Investments, and China Asset Management—recently launched Bitcoin (BTC) and Ethereum (ETH) spot ETFs in Hong Kong. Despite the relatively modest trading volume of $12.7 million on the first trading day, across various currency pairs, this launch underscores the growing significance of the Hong Kong ETF market.
Of note, ChinaAMC’s Bitcoin ETF garnered the highest volume despite its comparatively higher fee structure of 99 basis points. Ethereum ETFs accounted for 23% of the total first-day volume, while Bitcoin dominated with 77%, as per insights from Kaiko.
In the Asia-Pacific region, the demand for exposure to cryptocurrencies remains robust. Recent mandatory 13F filings with the U.S. Securities and Exchange Commission revealed that a Hong Kong-based asset manager holds the largest stake in BlackRock’s IBIT fund.
Although there has been a slowdown in inflows into spot crypto ETFs, institutional interest in tokenizing real-world assets (RWA) is gaining momentum. Last week, BlackRock’s BUIDL fund surpassed the $300 million milestone, surpassing Franklin Templeton’s BENJI to become the largest tokenized U.S. Treasuries fund. This growth trajectory was propelled by a significant transfer of $95 million by Ondo Finance into BlackRock’s fund.
