BlackRock IBIT’s Bitcoin Exchange-Traded Fund (ETF) experienced a significant inflow of $788.3 million on Tuesday, driven by Bitcoin’s unprecedented surge beyond the $69,000 mark. This immersive performance attracted a new wave of investors and increased the fund’s assets under management (AUM) by 30.2%, reaching a close record of $3.58 billion.
The rise in Bitcoin’s value solidifies it as a strong investment, enabling cryptocurrency ETFs to serve as a safer avenue for investors to navigate the turbulent crypto market. These ETFs also provide a simpler way for investors to gain exposure to Bitcoin, eliminating the task of buying and protecting the digital asset themselves.
Other investment platforms are considering implementing their own Bitcoin ETFs, in light of the ongoing upsurge in the crypto market. The increased investment in crypto emphasizes the need for regulatory authorities to clarify guidelines for investor protection.
Amid the Bitcoin boom, the U.S. bitcoin spot ETFs almost reached a daily trading volume of $10 billion due to IBIT’s strong performance. However, not all funds had a positive run. Grayscale’s converted GBTC fund had outflows of $332.5 million, while other spot bitcoin ETFs collectively recorded an inflow growth of $648.4 million.
Overall, despite Grayscale GBTC fund’s high cost leading to a decrease in its holdings, spot Bitcoin ETFs have seen an increase. While these ETFs have amassed more than $8.5 billion in net inflows since launching in January, the GBT fund has experienced significant losses approximately 30% to just over 385,000 BTC, reducing its value from $41 billion to around $26 billion.
Finally, Bitcoin reached a peak price of $69,325, leading to record-breaking trading volume for U.S spot bitcoin ETFs. Within minutes, it sharply dropped to $59,225, causing about $1 billion to be liquidated. Despite being deemed a risky venture by critics due to its volatile nature, supporters continue to celebrate Bitcoin’s decentralized characteristic and potential as a hedge against inflation amidst economic uncertainties.
Bitcoin has seen a rise of about 350% since November 2022, affirming its potential to captivate investors globally despite the financial roller coaster and predicament. The crypto boom’s impact on the financial landscape continues to induce different reactions from various sectors, marking a distinct chapter in investment history.
