Bitcoin ETF Breaks Record Again with $612 Million Inflow

Bitcoin ETFs set another record today, driven by fear of missing out on the latest crypto rise. Bloomberg figures show that BlackRock Inc.'s iShares Bitcoin Trust (ticker IBIT) earned $612 million Wednesday, shattering a record established a day earlier. Despite Grayscale Bitcoin Trust's losses, the 10 new exchange-traded funds investing directly in the world's largest cryptocurrency raised $673 million. The funds' cash flow surpassed their Jan. 11 debut day record of $655 million.

As Bitcoin breaks $60,000 and heads toward new highs, money pours into ETFs, particularly BlackRock's IBIT, explaining its amazing performance this year. Economic fundamentals—supply and demand—drive the upswing. Since Bitcoin ETFs were established last month, demand has outpaced long-term holders' willingness to sell.

The successful debut of the ETFs has helped Bitcoin rise more than 40% this year, making it the top performer across all asset classes. As spot ETF proponents promised, last month's new products opened the door to additional investment, enabling institutional and ordinary traders a new and easier way to sink cash throughout the asset class. The group's trading value, excluding Grayscale's fund, increased to over $6 billion, with IBIT accounting for over half.

A sharp correction around about now would be healthy to shake out some of the froth,” said Crypto is Macro Now newsletter contributor Noelle Acheson. “It’s way too early in the cycle for high market prices.”

Buying spot Bitcoin ETF shares does not affect the cryptocurrency's price in real time. However, new Bitcoin issuers must buy physical Bitcoin to hold enough tokens to support their shares. After all, “spot” indicates issuers must hold Bitcoin, not a derivative

Bloomberg Intelligence reports that IBIT is on track to reach $10 billion in assets in seven weeks, the fastest for an ETF. Bitcoin funds are sometimes compared to the $54 billion SPDR Gold Shares (GLD) founded in 2004, which took over two years to reach that level.

Some people still avoid ETFs despite their widespread availability. Some huge, established firms, like Vanguard Group Inc., have declined to incorporate the new ETFs to their massive trading platforms, while others need to be convinced. Others gave up. Bloomberg stated that Bank of America Corp.'s Merrill arm and Wells Fargo & Co.'s brokerage business provide Bitcoin ETFs upon request.

There is growing appreciation for the fact that access to the new nine has yet to be fully built out,” noted Stephane Ouellette, CEO of digital asset institutional platform FRNT Financial. He noted that digital asset investors are guessing on how widespread Bitcoin ETF demand would be.

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