BTC created a massive upper wick on the weekly chart as the last closure took place, and the excitement around ETFs reversed. What caused panic among investors was not the short-term predictions but the voluminous sales exceeding 5 billion dollars. So, what are the things we need to know about Spot Bitcoin ETFs? What do the latest data tell us?
Current Situation of Spot Bitcoin ETFs
BTC price has fallen by about 7% since the ETF approval. The weekly low was $41,753. However, expectations were quite different before the approval. People expected the spot Bitcoin ETF to increase the market’s appetite for risk with clear inflows. If we look at the volume data, the inflows were quite satisfactory. There was a volume of 10 billion dollars in the first three days.
Bloomberg ETF Expert Eric wrote that all 500 ETFs launched in the year 2023 have reached a combined volume of 450 million dollars so far, but spot BTC ETFs quadrupled this in just three days. So, the narrative of an epic start was true, and it happened.
“Getting volume is hard. It’s even harder than flows and definitely harder than active assets. Because volume has to occur naturally in the market, it really can’t be faked. And it gives ETFs a lasting power.”
However, the problem here is that about half of the volume came from GBTC, and there were net outflows here. Investors who entered the race to sell GBTC shares in ETF form as the negative premium was neutralized made net outflows of 1.2 billion dollars in three days.
According to Capital15C’s report on X, GBTC sold 27,122 BTC, which is 4.4% of its 619,200 BTC reserve, within the first four days after its launch. This sale happened more through Coinbase Prime than the spot markets. The presence of OTC demand was the most positive thing during this process.
While GBTC was selling, fortunately, BlackRock and others increased their assets. IBIT reserves rose from 2,621 to 25,067. According to the latest data from ETF issuers, spot ETFs now own a total of 651,819 BTC. So, despite GBTC outflows, net inflows continue.
What Will Happen Next?
The “sell the news” event happened, albeit forced by whales’ billion-dollar sales. BTC price looks weak for now, but remaining stable while GBTC redemptions continue might not be such a bad thing. Jurrien Timmer, the global macro director of the trillion-dollar asset management firm Fidelity, recently wrote;
“We are likely seeing a short-term position adjustment, not a long-term trend reversal. However, the unwinding of more than 13,000 futures contracts could create some volatility in price movements in the coming weeks.”
Matthew Sigel, head of digital assets research at VanEck, said;
“We are pleased to see ETFs trading with such liquidity, tight spreads, and small discounts to NAVs. We expect institutional investors to accelerate their purchases in the coming quarters as asset allocation models, including Bitcoin, are launched.”
Standard Chartered expects ETFs to see over 50 billion dollars in net inflows throughout the year. If this happens, the price could push the ATH level higher.
