BlackRock’s Spot Bitcoin ETF Attracts Net Inflows of $526 Million

Despite massive inflows into BlackRock’s IBIT, BTC was unable to break through important price resistance.

Since March, BlackRock’s IBIT has seen the largest daily inflow.

Bitcoin was unable to overcome a significant price barrier level.

According to preliminary data released by Farside Investors, BlackRock’s iShares Bitcoin Trust (IBIT), an exchange-traded fund (ETF) listed on the Nasdaq that closely tracks the spot price of cryptocurrencies, attracted $526.7 million in investor funds on Monday.

Data source Coinglass claims that’s the greatest one-day total since March. BlackRock’s alone has brought in close to $19.5 billion in investor capital since its founding on January 11.

The final ten U.S.-listed ETFs lost investor favor on Monday, drawing in a meager $6.9 million net inflow. 

On Monday, Bitcoin (BTC) momentarily crossed the $68,000 threshold, hitting its highest point in more than a month. The upward trend occurred in the wake of a speculation that Republican presidential candidate Donald Trump, who supports cryptocurrency, would declare a greater role for Bitcoin in the financial system later this month at the BTC conference in Nashville.

However, the purchasers were unable to break through the trendline that linked the highs from March and April, which allowed for another decline. A similar inability to break over the resistance line in late May created the conditions for a retreat to less than $55,000.

At the time of writing, the value of the cryptocurrency was $66,440, a 1.8% decrease over the previous day.

After $530 million in inflows into ETFs, a bitcoin trader warns of a local BTC price peak.

In the past, significant ETF inflow days have caused a “profit taking” spike in the price of BTC, but Ether’s ETF launch day has not affected either currency.

In spite of a spike in institutional buying, bitcoin faces a wave of “profit taking” and price decline.

Popular trader Skew warned of a “headline curse” in his most recent research on X on July 23, the day that over $500 million was invested in US spot Bitcoin BTC $66,520 exchange-traded funds (ETFs).

Not enough ETF flows to keep the price of bitcoin rising

This week has seen a rise in interest in Bitcoin ETFs, but Skew noted that these positive developments are not likely to last.

After the largest US spot ETF, BlackRock’s iShares Bitcoin Trust (IBIT), saw $526 million in inflows on June 22 alone, he issued a warning. He made the observation that in the past, days with such large inflows have been followed by BTC price sell-offs.

Even if this is positive, he concluded, “every time IBIT reported mid-high 9 fig inflow days, it occurred around market supply zones.”

Data from various sources, such as the UK-based investment business Farside Investors, indicates that the netflow total for US spot ETFs on July 23 was 533.6 million, the highest amount since March.

The market dropped approximately 25% between March, when BTC/USD reached its all-time high that remains today.

“The obvious concern at this point is whether the market can support this demand in terms of really trading this & momentum for higher prices,” Skew said.

He underlined that “consistent” demand for spots, spot takers absorbing supply, and complete seller absorption are necessary to sustain current levels and possible rises.

As of this writing, the price of bitcoin was approximately $66,550, down 1.5% from the previous day, according to statistics from TradingView and Cointelegraph Markets Pro.

The price of Ethereum remains unchanged hours before the introduction of the ETF.

In the meanwhile, attention is focused on other issues surrounding Ethereum ETFs.

Spot Ether ETH $3,497 ETFs, which were given the go-ahead by US regulators to start trading on July 23, have not succeeded in causing the price of the biggest altcoin by market capitalization to soar as expected thus far.

As opposed to Bitcoin in the days leading up to its ETFs going live in mid-January, ETH/USD is flat today and risen barely 1.5% over the previous week.

BlackRock’s Bitcoin ETF sees $523 million in inflows on its largest day since March.

On the same day that a flurry of spot Ether ETFs received approval to start trading in the US, the BlackRock’s iShares Bitcoin Trust ETF saw inflows of over $500 million.

With more than $523 million coming into the BlackRock’s spot Bitcoin exchange-traded fund (ETF) on Monday, it saw its largest day of inflows in more than four months.

Seven,759 Bitcoin were acquired by the iShares Bitcoin Trust ETF (IBIT). 

BTC $66,597 on July 22. That amount is currently valued at slightly over $523 million, based on Hey Apollo data that its co-founder referenced in a July 23 X post.

With the inflows on July 22, IBIT now has 333,000 BTC under management, which is almost $22 billion at current pricing.

In terms of US dollars received, it is the seventh-largest day on record for IBIT inflows.

The greatest day of inflows into IBIT occurred on March 18, when $849 million worth of Bitcoin were added to the fund.

According to FarSide Investors data, the fund had inflows of $788 million on March 5, making it the second-largest day on record.

On the same day that a list of spot Ether ETH $3,509 ETFs was authorized for trading in the US, BlackRock’s fund saw significant inflows.

10% to 20% of the flows that spot Bitcoin ETFs have produced since their inception in January are anticipated to be generated by Ether ETFs, according to industry analysts.

In the meanwhile, a number of analysts who chatted with Cointelegraph on July 21 are optimistic about Bitcoin in the near to medium term. They pointed to Trump’s increased chances of winning the election and US President Joe Biden’s abrupt withdrawal from the presidential contest as significant upward drivers for the price of Bitcoin.

At the next Bitcoin 2024 conference in Nashville, Tennessee, on July 25, founder of 10x Research Markus Thielen conjectured that there was a good probability Republican Party nominee Donald Trump would unexpectedly declare that he would designate Bitcoin as a strategic reserve asset.

According to Thielen, this might cause the price of Bitcoin to vary in a “parabolic” manner over the next few weeks.

On July 22, Bryan Courchesne, the founder of the cryptocurrency asset management company DAIM, reiterated this forecast, stating there was a strong chance Trump will declare Bitcoin to be a strategic reserve asset during the conference.

Pre-market trading for BlackRock’s spot Ethereum ETF starts despite forecasts of low demand.

Following SEC approval, BlackRock’s Ethereum ETF began pre-market trading early on July 23, 2024.

Within six months, analysts project inflows into the ETFs of up to $5.4 billion.

Pre-market trading for BlackRock’s Spot Ethereum ETF began early on Tuesday after the SEC approved three spot Ethereum ETFs.

The approval of this development removes the need for mainstream investors to manage the digital asset themselves by enabling direct investments in Ethereum, even though staking and other stake-based derivatives have not been enabled.

In a video ad for BlackRock’s Ethereum ETF, Jay Jacobs, the US Head of Thematic and Active ETFs, said, “You could think of Ethereum as a global platform for applications that run without centralized intermediaries.” While many find the main attraction of Bitcoin to be its scarcity, many find the appeal of Ethereum to be its utility.

For Ethereum and the larger cryptocurrency market, the SEC’s approval of significant asset management companies like Fidelity, Grayscale, and Franklin Templeton is a significant turning point. These ETFs are expected to begin trading at 9:30 AM EDT today. As of this writing, CoinGecko statistics indicates that the price of Ethereum is roughly $3,525, up 1% from the previous day.

While some experts project inflows of up to $5.4 billion into these ETFs during the first half of the year, Wintermute, an algorithmic trading business, has a more cautious view. Based on lower-than-expected demand, the business projects inflows of between $3.2 to $4 billion. According to Wintermute, Ethereum ETFs should experience 15% to 20% of the flow seen in Bitcoin ETFs, which could result in an 18%–24% spike in ETH’s price.

Two reasons for Ethereum ETFs’ “muted demand”

Wintermute cites two main reasons for its less positive prediction.

Firstly, Ethereum might be less appealing as an investment vehicle if the ETFs don’t have a staking mechanism. Since the network’s transition to proof-of-stake in 2022, staking—which enables users to earn rewards by delegating tokens—has been a fundamental part of Ethereum’s security paradigm.

Yield-seeking investors may find these ETFs less appealing because they do not allow Ethereum staking. The subtleties are explained in full in earlier coverages of this topic by Crypto Briefing.

Another major obstacle for Ether ETFs, according to Wintermute, is the absence of a unified story to draw in investors. It might be difficult to convey a coherent investment thesis to prospective ETF buyers due to Ethereum’s more complicated ecosystem and wide range of applications, in contrast to Bitcoin, It has successfully profited on the myth of “digital gold”.

Despite these difficulties, Wintermute asserts that investors drawn to technological advancements and a variety of blockchain applications may find Ethereum’s dual role as a digital currency and a platform for decentralized applications and smart contracts appealing. The introduction of Ethereum ETFs is a big step toward democratizing cryptocurrency investing for regular investors, and it might have an effect on the market for cryptocurrencies as well as the larger financial system.

Ethereum spot ETFs are approved by the SEC; trading will begin tomorrow.

With this permission, Ethereum became the first major player in regulated financial products.

On July 23, 2024, Ethereum spot ETFs will be live after receiving SEC approval.

Large financial firms, such as Fidelity and Grayscale, are about to introduce these exchange-traded funds.

The US Securities and Exchange Commission (SEC) has approved the introduction of several Ethereum spot ETFs, with the first transaction date set for July 23, 2024.

After a protracted review process, the SEC finally made its decision. Initially, it was cautious because of worries about Ethereum’s security categorization and staking complexity. But after a successful legal challenge by Grayscale Investments in August 2023, which supported Ethereum ETFs in addition to Bitcoin ETFs, the situation altered.

A number of financial firms are getting ready to introduce their Ethereum spot ETFs on exchanges such as NYSE Arca and the Chicago Board Options Exchange (CBOE), including Grayscale Investments, Bitwise, iShares (BlackRock’s), Fidelity Investments, Invesco, VanEck, Franklin Templeton, and 21Shares.

Spot Ethereum ETFs: What are they?

The futures-based Ethereum ETFs that have been offered in the US market since October 2023 are very different from spot Ethereum ETFs. Spot ETFs offer a simpler investing alternative for individuals looking to gain exposure to Ether, as they immediately follow the price of Ethereum, whereas futures ETFs expose investors to Ether futures contracts.

It is anticipated that the approval and introduction of spot Ethereum ETFs would have a significant impact on the larger cryptocurrency market. Analysts estimate that over the next several months, these funds may draw billions of dollars in inflows, which would raise the price of ETH and enhance the value proposition of the Ethereum network as a whole.

How ETFs for Ethereum were created

After weeks of work, the SEC and ETF issuers were able to finalize the disclosure documentation, leading to this final clearance. The exchanges’ May 19b-4 proposals, which set the stage for these funds to be listed, were previously authorized by the regulator.

The path taken to get here has been filled with detours. At first, a lot of industry watchers thought the SEC would turn down the proposals for spot Ethereum ETFs. But there was a noticeable uptick in talks between issuers and the regulator a few days prior to the May ruling, which some conjecture would be a result of a politically driven shift in position.

The disclosure in updated filings that these funds will not stake their ETH holdings was one significant event that occurred during this process. In addition to addressing possible regulatory issues, this decision cleared the path for the final approval.

Issuers still had to work out disclosure specifics with the SEC’s Division of Corporation Finance before the funds could be cleared for trade, even though the May 19b-4 approvals were a historic decision. Fund organizations filed their most recent round of registration statements by July 17; these contained anticipated fees for the ETH ETFs.

About six months have passed since the first US spot Ethereum ETFs were introduced in January, when the first Bitcoin ETFs did the same. Since their launch, those Bitcoin funds have attracted a lot of interest and have received net inflows of almost $17 billion. Experts in the field predict that interest in Ethereum exchange-traded funds (ETFs) will be relatively low, with projections indicating inflows of between 15% and 30% relative to Bitcoin ETF flows.

With the exception of Invesco Galaxy, which charges 0.25%, the majority of issuers have initially placed their trading fees at 0%, which could affect initial investing patterns.