BlackRock's Bitcoin ETF Surges with $780 Million Inflows in 3 Days

BlackRock's Bitcoin ETF Surges with $780 Million Inflows in 3 Days

EconomyBitcoin ETF

By Jakub Lazurek

07 Jun 2024 (12 days ago)

3 min read

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BlackRock’s Bitcoin ETF attracts $780M in 3 days, boosting its assets to $21.4B, driving Bitcoin prices up amid strong investor demand and Fed rate cut hopes.

BlackRock’s iShares Bitcoin Trust (IBIT) has significantly impacted the cryptocurrency market by attracting $780 million in Bitcoin (BTC) investments over just three days. This surge has increased IBIT's assets to $21.4 billion, surpassing Grayscale as the largest Bitcoin ETF. The influx of funds reflects strong investor sentiment driven by ETF demand and anticipated Federal Reserve rate cuts. Currently, Bitcoin’s price hovers around $71,200.

On Monday, IBIT saw no inflows. However, on Tuesday, it attracted $274.43 million, followed by $155.43 million on Wednesday. Data from SoSoValue shows an additional $350 million on Thursday, bringing the week’s total to nearly $780 million.

This performance positions BlackRock’s iShares Bitcoin Trust as a major player in the crypto market. With $21.4 billion in assets, it now surpasses Grayscale’s $20.1 billion and Fidelity Wise Origin Bitcoin Fund’s $12.3 billion. Other funds saw smaller inflows, with Fidelity’s and VanEck’s Bitcoin ETFs receiving $3.1 million and $2 million, respectively. In contrast, Ark Invest’s ARKB had significant withdrawals, with net outflows of $96.6 million. Grayscale’s converted GBTC and Bitwise’s BITB also faced outflows, losing $37.6 million and $3.1 million, respectively.

Spot Bitcoin ETFs have consistently attracted investors, with the longest streak of net inflows since their inception. These funds have accumulated $15.55 billion since January. Although inflows slowed during April and May, they have rebounded, though still below March’s peak.

Market analysts are optimistic about Bitcoin’s future. They predict Bitcoin could surpass its March peak of $73,798, driven by strong ETF demand and expected Federal Reserve rate cuts. Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors, commented, “There have been massive inflows into spot-Bitcoin ETFs. Macro continues to trend in crypto’s favor, with economic growth slower at a non-recessionary pace and signs of disinflation continuing.”

Other central banks have already started reducing interest rates. The European Central Bank (ECB) cut its key rate to 3.75%, and the Bank of Canada (BoC) reduced theirs to 4.75%. These cuts aim to stimulate economic activity by making borrowing cheaper, potentially increasing investments in cryptocurrencies. Lower interest rates generally reduce the appeal of traditional savings, pushing investors toward riskier assets like crypto.

In summary, BlackRock’s iShares Bitcoin Trust has attracted nearly $780 million in Bitcoin investments over three days, boosting its assets to $21.4 billion and becoming the largest Bitcoin ETF. This surge in investment reflects strong investor sentiment and is driven by ETF demand and anticipated Federal Reserve rate cuts.

The broader economic context, including interest rate cuts by major central banks, supports this positive outlook for the cryptocurrency market. The continued growth and acceptance of Bitcoin ETFs underscore the increasing integration of cryptocurrencies into mainstream financial markets.

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