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Spot Bitcoin ETFs Experience a Dip in Investor Interest
Ticker Tea
February 15, 2024
📝 SUMMARY: The enthusiasm for spot Bitcoin Exchange-Traded Funds (ETFs), which peaked with their launch earlier this year, is showing signs of waning. According to a recent analysis by JPMorgan Chase & Co. ($JPMC), Wednesday recorded the lowest single-day of gross inflows into these ETFs since trading commenced on January 11, with the nine new funds attracting approximately $270 million. However, when accounting for outflows from Grayscale Investment’s spot Bitcoin ETF, the overall net outflows reached around $153 million on the same day. This marks a continuation of a downtrend, with the third consecutive day of net outflows observed among the 10 funds involved.
The outflows have been uniquely from GBTC, which transitioned from a trust structure following the U.S. Securities and Exchange Commission’s (SEC) endorsement. This movement has prompted JPMorgan to label the flow performance of these ETFs as "disappointing," a sentiment that influenced their decision to downgrade the cryptocurrency exchange Coinbase Global Inc. earlier this week.
Since their introduction, the nine new ETFs have amassed $5.2 billion in inflows, which initially seemed to counterbalance the $4.4 billion exiting GBTC. Yet, the tide appears to be turning, with the rate of daily net outflows from GBTC diminishing and the inflows into the other nine ETFs decelerating at a quicker pace, leaving total net inflows at $857 million.
Despite this slowdown, the launch of the spot Bitcoin ETFs remains historically significant. Bloomberg Intelligence analysts have recognized it as the most successful ETF debut in terms of trading and flow metrics. This milestone underscores the initial high expectations and investor enthusiasm for cryptocurrency-based investment products, even as recent trends suggest a recalibration of investor interest.
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