BlackRock breaks records, Bitcoin ETFs soar

In case it wasn't already obvious, Bitcoin Exchange Traded Fund (ETF) Demand for the product has surpassed all expectations and is heating up.

Of the 575 ETFs launched this year, 14 of the top 30 were new or new products, according to Bloomberg data. Bitcoin or Ethereum The top four positions are occupied by Bitcoin funds.

Over the past four years, of the 1,800 ETFs that began trading during that period, BlackRock's iShares Bitcoin Trust was by far the largest in terms of inflows, data shows.

ETFs are popular investment vehicles traded on stock exchanges. This allows investors to buy and sell stocks that track the price of everything from the S&P 500 and gold to Bitcoin and real estate companies.

In January, the Securities and Exchange Commission (SEC) approved This allows 10 such funds to start trading on American stock exchanges after 10 years of denial.

This investment vehicle is widely popular, with billions of dollars flowing into it in just a few months. Last week they all together exceeded $20 billion Mark — Shattered expectations by doing in just 10 months what gold ETFs did in 5 years.

James Seifert, an ETF research analyst at Bloomberg Intelligence, said part of the reason for this rapid capital growth is that people who had wanted to invest in Bitcoin for some time had been looking to invest in Bitcoin for some time, but before the ETF was approved, it was safe and easy to do so. The blame lies with investors who didn't have the means to do so. Now that ETFs are being traded, demand for them is rapidly entering the market.

“I think part of it was pent-up demand,” he said. decryption. “But as people learn more, it's also a new demand.”

He added that traditional financial institutions, such as hedge funds involved in futures trading, are also interested in the product. “That's helping improve flows and demand,” he said, adding that hedge funds are longing ETFs and then selling futures contracts.

Large institutions including Morgan Stanley and Goldman Sachs are now exposed to Bitcoin through new products. Bitcoin prices hit a new all-time high in March after approval.

However, Ethereum's counterpart has not been so lucky so far. SEC approved The second largest crypto ETF made its reluctant debut in May. There hasn't been much in terms of capital inflows since trading began in July.

This is partially due to the fact that prior to July, Grayscale's Grayscale Ethereum Trust (ETHE) operated more like a closed-end fund than an ETF. The subsequent shift means investors who previously kept cash in the fund are rapidly redeeming their shares, leading to huge outflows.

According to data from Farside, $3 billion has flown out of the fund so far, bringing total flows across all nine currently traded Ethereum ETFs to negative $472.7 million.

However, that doesn't mean demand won't increase. Investors are putting money into other products, which could mean a turnaround is just around the corner.

“It’s just that the outflow from ETHE is overwhelming the inflow to other things.” [Ethereum] ETFs,” Seifert added. “For now.”

Edited by Andrew Hayward