BlackRock Bitcoin ETF Sees Record $750 Million Inflows – What’s Going On?

BlackRock’s Bitcoin ETF, IBIT, has shattered another record for daily inflows, absorbing $788.3 million from investors Tuesday alone.

All that money goes straight into buying more Bitcoin (BTC), which the company holds with Coinbase and uses to directly back its shares. Less than two months after launch, BlackRock has now absorbed over $9.1 billion in net flows and owns $11.4 billion in BTC on behalf of its clients.

BlackRock’s Bitcoin ETF Dominance

IBIT now ranks 2nd among all ETFs in 1D flow, 1W flow, 1M flow, and 3rd in YTD flows,” wrote Bloomberg ETF analyst Eric Balchunas in a Tuesday X post.

As the market’s new Bitcoin ETF of choice, IBIT has shattered numerous metrics in a convincing display of one of the most successful ETF launches of all time.

Bitcoin ETF Flow – 5 March 2024

All data in. $648m total net inflow for the day. Largest inflows since day 1. Blackrock with a record +$788.3 million day. pic.twitter.com/zOJ5Y5XsEx

— BitMEX Research (@BitMEXResearch) March 6, 2024

Tuesday was also a record-breaking day for ETF trading volume, with the Bitcoin funds collectively handling $10 billion in volume.

Bitcoin’s price briefly tapped a new all-time high of $69,200 on Tuesday before crashing back to $61,000. As of Wednesday, it trades flat at roughly $67,000 – up 51% year to date.

Analysts share different theories on where ETF demand is coming from. While many initially thought institutions were buying in, Bitwise CIO Matt Hougan suggested on Tuesday that corporations and major wirehouses are yet to plug into the market and that much demand so far is coming from retail.

Net inflows to Bitcoin ETFs yesterday were the second largest to date, counting $648 million despite a $332.5 million outflow from the Grayscale Bitcoin Trust (GBTC).

“First small taste of how ETF investors gonna be way better HODL-ers then (some) people think,” wrote Balchunas to X.

Why Bitcoin ETFs Are So Successful

In a recent interview at the Madeira Bitcoin conference, Bitcoin billionaire Michael Saylor said that the success of the Bitcoin ETF has even surpassed his expectations.

“We thought that maybe Bitcoin was a competitor to gold, but it has actually run up the leaderboard, and now it’s starting to nip at the heels of the S&P 500 Index ETFs,” he said.

According to the executive, Bitcoin ETFs will soon surpass gold ETFs in AUM, making Bitcoin the largest commodity ETF in the United States.

“These ETFs opened up an entire financial world of awareness, opportunity, and functionality to the 99% of mainstream investors,” he added.