Bitcoin ETF Inflows Surge to $2.9B in Just Four Days of Trading

After just four days since the introduction of spot Bitcoin Exchange Traded Funds (ETFs), the crypto market has witnessed a substantial influx of over $2.9 billion, excluding funds tied to Grayscale Bitcoin ETF (GBTC).

Top Three Bitcoin ETF Issuers

Among the 11 initial spot Bitcoin ETFs, BlackRock Inc (NYSE: BLK), Fidelity Investments, and Bitwise emerged as the top three providers. As per market data disclosed by BitMEX Research, BlackRock has emerged as the leading ETF provider with an impressive $1,085 million in inflows.

Following closely, Fidelity Investments secured the second position with $884 million, while Bitwise captured the third spot with $375 million in inflows. Ark 21Shares, Invesco, Franklin Templeton, Valkyrie, VanEck, Hashdex, and Wisdomtree were the next highest-ranking companies.

Cointucky Derby – Day 4 Flow – CHART

After 4 days of spot Bitcoin ETFs. There is over $2.9 billion of total inflow (excluding GBTC)

The top three providers after four days by inflow:

1. Blackrock $1,085m 🥇
2. Fidelity $884m 🥈
3. Bitwise $375m 🥉

Still waiting for GBTC day 4… pic.twitter.com/Q8bBiVN0nM

— BitMEX Research (@BitMEXResearch) January 18, 2024

Notably absent from the top rankings was Grayscale Investments, indicating a potential setback for the firm in the aftermath of the ETFs’ inception. Industry experts attribute this setback to Grayscale’s 1.5% management fee for the Grayscale Bitcoin Trust (GBTC), which currently stands as the highest among all spot Bitcoin ETFs issuers. By comparison, some of the competing Bitcoin spot ETF issuers keeps their rates from 0.2% to 0.9% with some even offering a period of moratorium depending on the volume traded.

Meanwhile, the introduction of spot Bitcoin ETFs triggered a massive retracement in the overall crypto market. The market cap, which briefly reached $1.82 trillion, retraced to $1.66 trillion. Altcoins like Ethereum (ETH) experienced a rebound as Bitcoin dominance slipped below 50%. Despite Bitcoin (BTC) trading sideways near $42,500, traders are eyeing opportunities below $40,000. However, experts suggest that the short-term impact of Bitcoin ETF approval may be dwindling.

Several factors have contributed to the recent market volatility. A combination of macroeconomic conditions, earnings season, and the strengthening US dollar has exerted selling pressure on Bitcoin. The US dollar index (DXY) reversed back above 103.50 from its early January levels of 101. This, coupled with a global shift in market sentiment, has led to fluctuations in trading volumes across cryptocurrencies.

Easing Selling Pressure on Bitcoin

While the market experienced over $100 million in total liquidation in the last 24 hours, there are indications that Bitcoin selling pressure is gradually easing. Coinglass data and recent macro data highlight a shift, with 75% of liquidations being longs and 25% shorts. As of the time of writing, Bitcoin is trading at $42,405, with a 24-hour trading volume of $19.8 billion.

Moreover, Futures and options data suggest that the short-term impact of spot Bitcoin ETFs may have already played out. The volatility levels for Bitcoin have dropped to new lows, with both realized and implied volatility witnessing notable declines. Traders are now eyeing the attractive funding rate, and BTC futures and options open interests are on the rise again.

However,  Ethereum open interest has slightly fallen, while Solana and XRP open interest is making a resurgence, signaling a potential comeback in prices.

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