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Inflows to spot bitcoin ETFs drop on second day of trading




By Reuters | Updated: 17 January, 2024

Jan 17 (Reuters) – Fund inflows to exchange traded funds (ETFs) tied to the spot price of bitcoin dropped to about $200 million on the second day of trading after attracting $629 million on their debut on Jan. 11, early estimates from J.P. Morgan showed.

Eleven such ETFs, with total assets under management worth $27.9 billion, entered the U.S. stock market in a watershed moment for the cryptocurrency industry after years of regulatory tussle over investor protection.

So far, ETFs by BlackRock (IBIT.O), opens new tab and Fidelity (FBTC.Z), opens new tab have attracted the most funds at nearly $500 million and $423 million, respectively, in the first two days of trading, the brokerage estimated.

However, details on fund flows from issuers such as Bitwise (BITB.P), opens new tab, Franklin (EZBC.Z), opens new tab and VanEck (HODL.Z), opens new tab are still awaited.

Bitcoin has surged nearly 60% since September end on bets that an approval would usher in new capital as exposure to the world’s biggest digital asset on a regulated exchange removes the hassle of directly owning it.

On the debut day, $4.6 billion worth of shares changed hands across all the products with Grayscale, BlackRock and Fidelity dominating trading activity.

The $26.53 billion Grayscale Bitcoin Trust (GBTC.P), opens new tab, which charges the highest fees at 1.5% among the 11 ETF issuers, saw outflows of $478 million over the first two days, J.P.Morgan said.

Profit-taking from early investors on the fund was widely expected as it was earlier a close-end fund trading at a discount to its underlying bitcoin assets.

J.P.Morgan had in November estimated that the fund could record nearly $3 billion in outflows after the ETF conversion.

© Thomson Reuters 2024

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