Spot Bitcoin ETFs are seeing inflows as signs of animal spirits in the financial market return and the crypto fear and greed index rise. Data shows that most of these ETFs have added substantial assets in the past few days while the Grayscale Bitcoin Trust (GBTC) continued its outflows.
FBTC, BITB, and ARKB inflows
Data shows that all spot Bitcoin ETFs now have over 827,975 coins under management. At the current prices, these coins translate to over $53.2 billion.
Cathie Wood’s Ark 21Shares Bitcoin ETF (ARKB) added 2,164 coins on Wednesday, bringing its total to 45,705. These coins are worth over $2.8 billion, making it the fourth-biggest fund in the industry. It has added 2,234 coins in the past 7 days.
Meanwhile, Fidelity’s Wise Origin Bitcoin Fund (FBTC) added 131 new coins on Wednesday and 874 coins in the last 7 days. It now holds 153,755 Bitcoins valued at over $9.6 billion. The Bitwise Bitcoin ETF (BITB) ETF has added 616 coins and it now holds 34,108 coins.
There are signs that the popular iShares Bitcoin Trust is losing momentum. It has added 433 new coins in the past 7 days and zero on Wednesday. It holds 274,755 coins valued at over $17.5 billion.
GBTC outflows continue
IBIT’s performance means that it will soon become the biggest Bitcoin ETF as it will overtake the GBTC, which has been shedding vast assets. It lost 2,931 Bitcoins in the past seven days, bringing its total assets to about 289,337.
GBTC’s outflows will likely continue because of its substantial fees. The fund has an expense ratio of 1.50%, meaning that a $100,000 investment costs $1,500 annually. In contrast, a similar investment in IBIT costs just $250.
Grayscale has constantly rejected calls to cut its fees to match its competitors. Instead, the company has hinted that it will launch another lower-cost Bitcoin ETF. I believe that the new fund will struggle to gain traction because of the rising competition.
Bitcoin ETF inflows are happening at a time when there are signs that cryptocurrencies and stocks will bounce back. Key global indices like the Nasdaq 100, S&P 500, and FTSE 100 indices have jumped to their record highs.
Also, Bitcoin has constantly remained above $60,000 and formed an inverse head and shoulders pattern, a potential bullish sign.
Additionally, there are signs that major central banks will start cutting interest rates soon. Sweden’s Riksbank has already slashed rates while the Bank of England (BoE) and European Central Bank (ECB) are expected to cut in June.
These cuts are coming as economies slow and inflation retreats. A report showed that the headline and core Consumer Price Index (CPI) dropped to 3.4% and 3.6%, respectively.
