Bitcoin ETF Inflows Dominating Bitcoin Buying

Crypto funds experienced a record $2.45 billion in global inflows last week, as reported by CoinShares. Inflows were boosted by the introduction of the new U.S. spot Bitcoin ETFs, bringing the year-to-date inflows to digital asset investment products to $5.2 billion. The AUM at these crypto investment firms reached $67 billion, the highest since December 2021. The U.S. accounted for 99% of these inflows.

One month after approval, spot bitcoin ETFs are a big hit with institutional investors and asset allocators. Bitcoin’s market cap has eclipsed $1 trillion for the first time since November 2021, while spot Bitcoin ETF volumes and flows are higher at this point in their lifecycle than any ETF asset launch in history. In fact, the ETFs have been so successful that a report by CryptoQuant suggests that 75% of new investments into Bitcoin are via the 10 spot Bitcoin exchange-traded funds (ETFs) that were approved in the United States on Jan. 11. “We estimate over 75% of new investment into Bitcoin are coming from these ETFs. Moreover, investment from these ETFs has increased to 2% of the total historical investment in Bitcoin in just one month as measured by the realized market capitalization,” said the report.

Earlier this month the total Assets Under Management of the recently launched US spot Bitcoin ETF products crossed US$10 billion. As of February 9th, driven by BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, which have accumulated AUMs of US$4.2 Billion and US$3.4 billion respectively, the total AUM of the nine Bitcoin ETFs (excluding the Grayscale Bitcoin Trust) exceeded US$10 Billion.

There are expectations that AUMs and net inflows into the spot BTC ETFs will rise in the coming months as several firms complete their due diligence on the products. Bloomberg reported in early February that investment into spot ETFs had slowed because of the due diligence processes of larger trading platforms.

This includes companies like LPL Financial Holdings, one of the largest independent broker-dealers in the world. The platform has held back on offering its nearly 19,000 independent financial advisers overseeing $1.4 trillion in assets access to spot Bitcoin ETF products because it is still determining whether they meet its due diligence standards. There are numerous other major institutional platforms waiting for spot BTC ETFs to be added to their approved list of investable products. 

The BlackRock iShares Bitcoin ETF (IBIT) achieved a significant milestone on Friday by becoming the first among the recently launched spot bitcoin products to amass over $2 billion in assets under management (AUM). This accomplishment positions IBIT as a major player in the rapidly expanding Bitcoin investment market.

Notably, this achievement excludes Grayscale’s GBTC, which, at the time of its transformation from a closed-end fund to a spot ETF, boasted an impressive $30 billion in AUM.

Investors demonstrated their confidence in IBIT on Thursday, injecting an additional $170 million into the fund. The influx of capital allowed IBIT to acquire 4,300 additional bitcoins, bringing total holdings to 49,952. With the price of bitcoin surging above $40,000 early on Friday, the AUM soared past the $2 billion mark.

With its newfound status, IBIT currently stands as the third-highest asset-gathering ETF among the more than 600 funds launched in the past year. Nate Geraci, President of ETF Store, predicts that IBIT could soon claim the top spot, surpassing its competitors.

Google to Allow ETF Ads

January 29th marked a pivotal day for the cryptocurrency industry as Google updated its advertising policies. The revision allowed certain cryptocurrency products, including bitcoin exchange-traded funds (ETFs), to be advertised on major search engines. This development has sparked speculation within the crypto community, with potential implications for the market in the coming months.

Back in December 2023, Google announced its intention to revise its crypto-related ads policy on January 29, 2024. The update will permit ads from advertisers offering “Cryptocurrency Coin Trust targeting the United States.” This includes financial products such as ETFs that enable investors to trade shares in trusts holding substantial amounts of digital currency.

Source: Google

As part of the certification process, potential crypto trust advertisers must obtain Google certification, showcasing the necessary license from the relevant local authority. Advertisers must also ensure that their products, landing pages, and ads adhere to all local legal requirements in the targeted country or region. This policy is set to apply globally to all accounts advertising cryptocurrency products. The forthcoming changes have heightened anticipation within the crypto industry, awaiting the potential impact on advertising strategies and market dynamics.

ADVERTISEMENT

Advertise with BNC