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Highlights
- The overall activity in the Bitcoin ETF market has turned subdued after initial strong inflows.
- GBTC outflows have slowed down but stand to a total of $16.46 billion as of now.
- Zero net inflows in the spot Bitcoin ETFs is no major cause of concern, says Bloomberg analyst.
For the second consecutive day this week, net outflows from spot Bitcoin ETFs persisted on Tuesday, April 16. According to data from Farside Investors, the total outflow from Bitcoin ETFs amounted to $58 million. Activity in the Bitcoin ETF market has generally been subdued in recent times.
GBTC Outflows Slow Down
The outflows from the Grayscale Bitcoin ETF GBTC have shown signs of slowing down this week. On Tuesday, April 16, the total GBTC outflows stood at $79.4 million. With this, the total outflows from the Grayscale BTC ETF currently stand at $16.46 billion. Interestingly, the Ark Invests’ Bitcoin ETF ARKB also registered net negative outflows to the tune of $13 million on Tuesday.
While the outflows from the GBTC have slowed down in recent days, so have the overall inflows into spot Bitcoin ETFs. On Tuesday, the BlackRock ETF IBIT recorded the highest net inflow among Bitcoin spot ETFs, amounting to approximately $25.78 million. Thus, the total inflows in BlackRock’s IBIT have now surged past $15.3 billion.
Net Zero Inflows In Bitcoin ETFs A Concern?
According to Bloomberg ETF analyst James Seyffart, it’s common for Bitcoin exchange-traded funds (ETFs) to experience days with zero inflows, and this shouldn’t be seen as a failure of the products. On a typical day, most United States ETFs, across various sectors, record zero inflows, which is a normal occurrence, said Seyffart.
Okay too many questions about #Bitcoin ETFs and zero flows — a few quick thoughts:
1. On any given day, the vast majority of ETFs will have a flow number of ZERO — this is very normal. There are ~3,500 ETFs in the US. Yesterday 2,903 of them had a flow of exactly zero
— James Seyffart (@JSeyff) April 16, 2024
James Seyffart explains that shares within ETFs are generated or eliminated in creation units, which occurs only when there is a significant imbalance between supply and demand. This discrepancy must be substantial enough to warrant engaging with the underlying market and surpass the size of a creation unit.
Creation units represent the batches in which ETF shares are formed and redeemed. Each ETF may have a distinct creation unit size. For instance, in the context of spot BTC ETFs, these units comprise blocks of shares ranging from 5,000 to 50,000 shares.
Therefore, a creation or redemption transaction will solely transpire if there exists a significant disparity between supply and demand, and if the associated costs of executing such a transaction are lower compared to traditional market-making and hedging methods.
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