Bitcoin ETF Inflows Surge as Restored Cryptocurrency Performance Fuels Investor Interest

Bitcoin ETF inflows: Inflows into newly launched exchange-traded funds (ETFs) linked to Bitcoin have rebounded this week following a recovery in the cryptocurrency's price after a recent dip. 

Todd Rosenbluth, head of research at VettaFi, an analysis firm, noted that the resurgence in bitcoin's performance has reignited investor interest in the ETFs.

Data from BitMEX Research reveals that the nine ETFs introduced in January attracted nearly $1 billion in assets within the first two days of this week. Wednesday's flow data will be accessible on Thursday morning.

The leadership position has shifted from BlackRock's iShares Bitcoin Trust to the Fidelity Wise Origin Bitcoin Fund. The latter garnered $540.9 million in assets on Monday and Tuesday, surpassing the $197.7 million attracted by BlackRock's fund during the same period, according to BitMEX data.

The Grayscale Bitcoin Trust, which transitioned into an ETF simultaneously with the other nine funds, has experienced consistent outflows since then, irrespective of Bitcoin's price fluctuations. Outflows from the Grayscale Bitcoin Trust totalled $562.4 million in the first two days of this week.

David Mercer, CEO of LMAX Group, an institutional cryptocurrency exchange, observed that the current numbers are heavily influenced by Grayscale.

Despite the significant flows into the ETF market, Mercer highlighted that they represent only a fraction of Bitcoin's total market capitalisation. Nevertheless, he pointed out that ETF flows appear to be influencing bitcoin's price dynamics currently. Mercer stated, "The bitcoin price couldn't rally when you saw outflows in the ETFs."

(With Reuters inputs)