Bitcoin ETF: Record influx of institutional investors at $417 million

The cryptocurrency market has had a tumultuous week characterized by increased volatility and significant shifts in investment flows. One of the most notable trends is the massive influx into Bitcoin Spot ETFs. This stands in stark contrast to the substantial outflows from Grayscale Bitcoin Trust (GBTC) products.

According to SoSoValue, the Bitcoin spot ETF had a total net inflow of $417 million yesterday. Grayscale ETF GBTC experienced a net outflow of $212 million in a single day, with the current historical net outflow of GBTC at $14.36 billion. The Bitcoin spot ETF with the highest… pic.twitter.com/hzxGxfXCbo

— Wu Blockchain (@WuBlockchain) March 27, 2024

Unprecedented Inflow into Bitcoin Spot ETFs

The interest in Bitcoin ETFs continues to rise. According to SoSoValue, Bitcoin Spot ETFs recorded a total net inflow of 417 million dollars on March 26, 2024. This amount indicates a peak of institutional interest in Bitcoin derivative products directly backed by the cryptocurrency.

Fidelity FBTC in the Spotlight

Fidelity’s ETF FBTC, which was launched just two weeks ago, has captured the majority of this influx. We’re talking about a net inflow of 279 million dollars. Low management fees (0.95%) and a straightforward investment structure of this Bitcoin ETF appear to be enticing investors.

Grayscale GBTC: A Fading Model

Grayscale Bitcoin Trust (GBTC), which has long dominated the Bitcoin ETF market, experienced a difficult day. It shows a net redemptions of 212 million dollars. This negative trend is part of a long-term pattern, bringing the total net outflows to 14.36 billion dollars since the beginning of the year.

Several factors explain this disinterest in GBTC:

• Closed structure: GBTC is a closed-end fund, which limits liquidity and makes the investment more rigid.
• High management fees: GBTC charges management fees of 2%, which is considered excessive compared to Bitcoin Spot ETFs.
• No conversion to Spot ETF: Unlike its competitors, Grayscale has not yet converted its Trust into a Spot ETF. This deprives investors of certain tax advantages and better traceability.

The massive influx into Bitcoin Spot ETFs and the significant outflows from GBTC indicate a shift in preferences among institutional investors. They now seem to favor products offering direct exposure to the Bitcoin price with a more transparent investment structure.