U.S. exchange-traded funds (ETFs) investing directly in Bitcoin have experienced net inflows for an unprecedented 18 consecutive days, driving the largest digital asset towards a record high. As of Thursday, net subscriptions for nearly a dozen Bitcoin-focused ETFs reached $15.6 billion since their launch on January 11, bringing total assets to $62.3 billion, according to Bloomberg data.
These Bitcoin ETFs, from prominent firms like BlackRock Inc. and Fidelity Investments, have become some of the most successful ETF launches in history, significantly shifting crypto’s center of gravity to the U.S. from Asia. The sustained inflows have raised speculations in the options market that Bitcoin could surpass its all-time peak of $73,798, achieved in March, supported by ETF demand and anticipated Federal Reserve interest rate cuts.
Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors LLC, noted in a report, “There have been massive inflows into spot-Bitcoin ETFs. Macro continues to trend in crypto’s favor, with economic growth slower at a non-recessionary pace and signs of disinflation continuing.”
BlackRock’s $21.4 billion iShares Bitcoin Trust recently became the largest Bitcoin fund globally, surpassing Grayscale Investments LLC’s $20.1 billion Bitcoin trust. The $12.3 billion Fidelity Wise Origin Bitcoin Fund ranks third.
SEC Pivot
The U.S. Securities and Exchange Commission (SEC) reluctantly permitted spot-Bitcoin ETFs in January following a court reversal in 2023. In a surprising move in May, the SEC also pivoted towards approving funds for the second-largest token, Ether. Despite this, SEC Chair Gary Gensler remains critical of the digital-asset industry’s compliance with regulations, while congressional efforts to clarify crypto legislation are gaining momentum.
Ophelia Snyder, president of crypto ETF provider 21 Shares AG, highlighted the nascent stage of digital-asset fund adoption among institutions and intermediaries. “The market has quite a way to run and we’re still in quite early innings,” she stated on Bloomberg’s Tiger Money podcast.
Bitcoin has more than quadrupled since the beginning of last year, overshadowing the painful bear market of 2022 that exposed frauds and led to the imprisonment of high-profile figures like Sam Bankman-Fried.
As of 12:35 p.m. Friday in Singapore, Bitcoin remained steady at about $71,100, while Ether was little changed at $3,810.
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