Bitcoin, the biggest cryptocurrency, returns to its normal trading price after recording a heavy correction post the launch of the spot Bitcoin Exchange-Traded Fund (ETF). Bitcoin price reportedly dropped by around 20% since the ETF launch and dragged it to trade at the $38k price level last week. However, the latest data suggests that the crypto ETF buzz is hitting its low in just a few trading weeks.
JPMorgan on ETF
JPMorgan has reported that spot Bitcoin ETFs recorded net sales of around $15 million on January 26. This is the data from the eleventh day of trading for these products. The net inflows on that day reversed a four-day streak of redemptions, but the absolute size of the sales remained relatively small.
The investment giant noted that Grayscale’s Bitcoin Trust (GBTC) continued to register slowing outflows. However, the sales of BlackRock’s IBIT, the largest of the newly launched ETFs with approx $2.2 billion in assets under management (AUM), showed signs of deceleration.
Walter Bloomberg reported that the preliminary data suggests a slowdown in transaction volumes. This indicates that the initial hype around these ETFs might be abating. It also marks that the market is entering a potentially more normalized flow environment. Despite the recent fluctuations, Bitcoin’s price stood strong at around $42,000. BTC’s 24 hour trading volume jumped by around 4% to stand at $15.7 billion.
According to the data, the cumulative transaction volume for the SEC approved Bitcoin spot ETFs over their first 11 trading days stood at around $1.67 billion. The total net asset value stands at $26.74 billion.
Who’s leading?
It is important to note that Grayscale recorded a single-day net outflow of $255 million on January 26. This represents its smallest outflow since its initial trading day. The competition for the top spot in single-day net inflows has been among Fidelity’s FBTC leading on the same with a substantial net inflow of approx $100 million, followed by BlackRock’s IBIT with a net inflow of $87.13 million.
Analysts suggest that the outflow of funds from GBTC to factors such as the transition from Bitcoin Trust to Bitcoin ETF. This signals that early investors redeemed arbitrage opportunities. However, higher management fees of GBTC compared to other products likely incentivized early investors to change positions.
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