Bitcoin ETFs Absorb $520 Million As Grayscale Outflows Reach New Low

Bitcoin spot ETFs sprang back into action on Monday as Bitcoin’s (BTC) price skyrocketed to $57,000 for the first time since November 2021.

Data compiled by BitMEX Research shows that Bitcoin ETFs experienced $520 million of daily net inflows – one of their top five best-performing days since launching on January 11. In total, the ETFs have absorbed $6 billion in BTC since their launch.

Bitcoin ETFs Bounce Back After Rally

That includes flows surrounding the Grayscale Bitcoin Trust (GBTC) – the world’s largest Bitcoin fund which converted into an ETF in January. Though the company’s high fee structure has triggered non-stop outflows from the fund in favor of cheaper competitors, yesterday’s daily outflow reached a record low of just $22.4 million.

This comes less than a week after the European Central Bank dismissed Bitcoin as having no real value, and called its rally following ETF approvals a “dead cat bounce”.

In the past 47 days, Grayscale has suffered $7.4 billion of outflows, while competing funds from BlackRock, Fidelity, and others have absorbed $13.4 billion. In total, ETFs now hold over 723,000 BTC, worth $41.2 billion at today’s price.

$ARKB with best flow day ever, Fidelity and Franklin with their 2nd biggest days ever. $IBIT tho relatively underwhelming at 'only' $111. As a team tho they netted half a billion. This is like when Embiid has an off night but Maxey and Harris pop off in Sixers blowout win. https://t.co/Rxe8FIFxEc

— Eric Balchunas (@EricBalchunas) February 27, 2024

BlackRock’s Record Bitcoin Trading Volume

Flows were impressive on Monday, as the nine newly launched Bitcoin ETFs – excluding Grayscale – experienced record daily volume totaling $2.4 billion, including $1.3 billion for BlackRock’s ETF alone. The figure put IBIT into the top 11 ETFs by volume in the entire country.

While “flows” refer to the amount of Bitcoin gained or lost by the fund, “volume” refers to the amount traded – whether it’s being bought or sold.

“Not totally sure reason besides price rally generating interest but it does seem like these things really see heightened action on first day after weekend,” Bloomberg ETF analyst Eric Balchunas posted to X on the matter.

Inflows to Bitcoin ETFs are proving to be correlated with Bitcoin’s price action. In January, Bitcoin dumped from $49,000 to $39,000 as Grayscale investors sold $500 million in BTC per day for several days in a row.

Likewise, the price rose back above $50,000 earlier this month as GBTC sales slowed down, and Bitcoin ETFs started absorbing ~$500 million per day in net flows.

Some analysts suspect that Bitcoin ETFs may ultimately hurt Coinbase’s bottom line by overtaking the firm as the nation’s most popular Bitcoin trading venue.