Bitcoin ETF Breaks Eight-Week Outflow Streak With $197 Million Weekly Inflow

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What to know:

  • Bitcoin ETF recorded $197.4 million in weekly net inflows, ending an eight-week streak of outflows for US spot funds.
  • BlackRock’s IBIT led the recovery with $291.9 million in inflows, while GBTC, Fidelity, and ARK 21Shares posted outflows.
  • Market participants linked renewed Bitcoin ETF demand to growing optimism over potential US crypto regulation and the proposed CLARITY Act.

Bitcoin ETF funds finally reversed their previous trend of losing client money, gaining net assets during the week. However, the recent performance of Bitcoin ETF funds has given market analysts hope that institutional interest may be on the rise.

According to data from Farside Investors, there were inflows of $197.4 million into US spot Bitcoin ETFs in the week that ended Friday. This is the first positive week in almost two months, during which there had been steady outflows for Bitcoin funds.

BlackRock Leads Bitcoin ETF Inflows

Most of the weekly inflow is attributed to iShares Bitcoin Trust (IBIT) of BlackRock, which had inflows of $291.9 million. But that was partly negated by outflows from the Grayscale Bitcoin Trust (GBTC), Fidelity Wise Origin Bitcoin Fund, and ARK 21Shares Bitcoin ETF.

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While positive ETF flows for Bitcoin are definitely promising, the most recent numbers pale in comparison to the $8.26 billion that has been redeemed from US spot Bitcoin ETFs since May 11. Investors have returned to buying, but not enough to offset the selling in the past two months.

Also Read | Ethereum Price Tests Key Resistance With $1,700 in Focus

Regulatory Expectations Support Investor Confidence

Some market participants see a connection between the change in flows for Bitcoin ETFs and increased expectations about crypto regulations in the US.

According to Jeff Yew, who is the founder and CEO of Monochrome Asset Management, one week of inflows cannot be considered an established trend. Nevertheless, he believes that institutions might be preparing for clearer regulation should the CLARITY Act pass in the US next month.

As pointed out by Yew, long-term investors will typically take more risk when there is anticipated regulation, thus suggesting that recent Bitcoin ETF inflows might be an indicator of increased institutional confidence.

Analysts Remain Cautious Despite Positive Flows

But not all market analysts are certain that the recovery has begun.

Founder and CEO of 10x Research, Markus Thielen, noted that the demand for ETFs is still lower than what would be required for the recovery to be confirmed. Another factor that might hinder the growth of Bitcoin is outflow from stablecoins, along with the usual August/September seasonality.

As stated by Thielen, “Bitcoin has been showing strength in the first part of each month but slowing down later,” and as such, it would need stable and consistent ETF inflows to restore its confidence.

Opinions about the market cycle of Bitcoin have been divided. Jamie Coutts, the chief crypto strategist at Real Vision, believes that the signals indicate less pressure on selling and that the cryptocurrency could be in the end stages of its bear market period. However, Russell Thompson, the Chief Investment Officer of Hilbert Capital, holds the opposite view.

Spot Ethereum ETFs in the US-listed segment posted a net gain of $84.42 million after eight consecutive weeks of outflows. Although this is good for both Bitcoin and Ether ETFs, it will take several consecutive weeks of positive flows to determine an institutional recovery.

Also Read |  Thailand’s Central Bank Tightens Rules on Large USDT Transactions



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