- Institutional investors are renewing their interest in spot Bitcoin ETFs, marked by a significant daily inflow on Monday, July 22.
- Over $533 million was directed into several spot BTC ETFs in the United States, according to early data from Farside Investors.
- However, contrastingly, retail trading on spot markets has been on a downward trend recently.
Discover the resurgence in Spot Bitcoin ETFs and understand what it signifies for institutional and retail investors alike.
Institutional Investors Fuel Bitcoin ETF Surge
This week has seen a renewed focus on spot Bitcoin ETFs among institutional investors, with Monday, July 22, recording the highest daily inflow since June 4. A staggering $533.6 million flowed into four of the eleven listed spot BTC ETFs in the United States, per preliminary data shared by Farside Investors. This marks 12 consecutive days of inflows for spot BTC ETFs. Meanwhile, retail trading on spot markets appears to be trending downward.
BlackRock’s Dominance in Bitcoin ETFs
The lion’s share of the inflow was captured by BlackRock’s iShares Bitcoin Trust (IBIT), which accounted for $526.7 million, equivalent to 7,759 BTC. This marks the largest single-day inflow for BlackRock since March. Currently, IBIT holds 327,179 BTC, valued at approximately $22 billion, making it the leading BTC fund globally. This positions it $3.5 billion ahead of Grayscale’s GBTC, which holds 272,061 BTC. According to Spencer Hakimian, founder of Tolou Capital Management, “The demand for Bitcoin via ETF has been relentless and unprecedented,” highlighting IBIT’s performance in surpassing the Invesco QQQ ETF, and potentially Vanguard’s Total Stock Market ETF as well.
Even though there were minor inflows for Fidelity’s FBTC and an outflow from VanEck’s Bitcoin Trust (HODL), BlackRock dominated the day’s activity. This influx of capital builds on last week’s momentum, which saw inflows exceeding $1.2 billion over five trading days.
Potential Impact of Ethereum ETF Launches
Adding a twist to the narrative, spot Ethereum ETFs are set to begin trading soon, raising questions about future capital flows. Analyst Willy Woo cautioned that some capital currently invested in BTC ETFs could potentially shift to ETH ETFs, though estimating the extent of this transfer remains challenging. Historically, Bitcoin surged 62% following the initial launch of spot ETFs, suggesting a similar trend could elevate Ethereum to potentially new highs, possibly reaching $5,300 by late September.
Market Response and Outlook
However, the overall crypto market is experiencing a short-term retreat. The market capitalization has dipped by 2% over the past 24 hours to $2.53 trillion. Bitcoin has seen a 1.4% decline, stabilizing at $66,600, with additional support expected at the $65,000 level if the downtrend continues. Ethereum mirrored this performance, dropping 1.3% to $3,450 on ETF launch day. Analysts predict ETH may experience further declines post-ETF launches. Altcoins, including Dogecoin (DOGE), Toncoin (TON), Avalanche (AVAX), Tron (TRX), Chainlink (LINK), and Polkadot (DOT), have also recorded significant losses.
Conclusion
The recent influx into spot Bitcoin ETFs underscores a growing institutional interest, with BlackRock leading the charge. While the retail market appears to be retracting, the launch of spot Ethereum ETFs could reshape the investment landscape once again. Investors should closely monitor these developments and brace for potential shifts in capital allocation, as historical trends suggest significant movements could be on the horizon.
