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BlackRock’s Bitcoin ETF, IBIT, has set a new record for daily inflows, attracting $788.3 million from investors on Tuesday alone.
This capital is directly invested in acquiring more Bitcoin (BTC), which the firm holds with Coinbase to back its shares. In less than two months since its inception, BlackRock has garnered over $9.1 billion in net flows and possesses $11.4 billion in BTC for its clients.
BlackRock’s Bitcoin ETF Leadership
IBIT is now positioned 2nd among all ETFs in 1D flow, 1W flow, and 1M flow, and ranks 3rd in YTD flows,” noted Bloomberg ETF analyst Eric Balchunas in a Tuesday X post.
As the preferred Bitcoin ETF in the market, IBIT has broken several records, showcasing a remarkable performance as one of the most successful ETF launches ever.
Bitcoin ETF Flow – 5 March 2024
All data in. $648m total net inflow for the day. Largest inflows since day 1. Blackrock with a record +$788.3 million day. pic.twitter.com/zOJ5Y5XsEx
— BitMEX Research (@BitMEXResearch) March 6, 2024
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Tuesday also marked a record for ETF trading volume, with Bitcoin funds collectively processing $10 billion in volume.
Bitcoin’s price briefly reached a new all-time high of $69,200 on Tuesday, before dropping back to $61,000. As of Wednesday, it is trading flat at approximately $67,000 – an increase of 51% year to date.
Analysts have varying theories regarding the source of ETF demand. While many initially believed that institutions were the primary buyers, Bitwise CIO Matt Hougan suggested on Tuesday that corporations and major wirehouses have yet to engage with the market, indicating that much of the current demand is coming from retail investors.
Net inflows to Bitcoin ETFs yesterday were the second largest recorded to date, totaling $648 million, despite a $332.5 million outflow from the Grayscale Bitcoin Trust (GBTC).
“First small taste of how ETF investors are likely to be much better HODL-ers than (some) people anticipate,” Balchunas remarked on X.
Reasons Behind Bitcoin ETFs’ Success
In a recent interview at the Madeira Bitcoin conference, Bitcoin billionaire Michael Saylor expressed that the success of Bitcoin ETFs has exceeded his expectations.
“We thought that perhaps Bitcoin was a rival to gold, but it has actually climbed the ranks and is now beginning to challenge the S&P 500 Index ETFs,” he stated.
According to the executive, Bitcoin ETFs are poised to surpass gold ETFs in assets under management (AUM), positioning Bitcoin as the largest commodity ETF in the United States.
“These ETFs have opened up an entire financial landscape of awareness, opportunity, and functionality to 99% of mainstream investors,” he added.
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