- Grayscale’s spot Bitcoin ETF experienced significant withdrawals, totaling $1.6 billion in outflows since the year’s start.
- Registered investment advisers and multifamily offices are now incorporating Bitcoin ETFs into their investment portfolios.
Hunter Horsley, CEO of Bitwise, predicts that wealth management firms will soon increase their investments in Bitcoin exchange-traded funds (ETFs). This expected rise corresponds with a recent uptick in the U.S. Bitcoin ETF market, where there has been a net positive inflow of funds. This trend is anticipated to continue following the Bitcoin halving event.
By the end of 2024, people are going to be stunned by how many wealth management firms own a bitcoin ETF.
They’re smart, many extremely well informed, and increasingly share conviction on Bitcoin. Oh, and they’re long only.
Going to be an amazing new constituent in the…
— Hunter Horsley (@HHorsley) April 20, 2024
Market data supports Horsley’s prediction, showing that Bitcoin ETFs are becoming more popular. Notably, the iShares Bitcoin Trust by BlackRock is nearing the asset size of Grayscale’s Bitcoin Trust, with only a $2 billion difference remaining.
If this trend persists, BlackRock might overtake Grayscale as the leading global Bitcoin fund. In contrast to BlackRock’s growth, Grayscale has faced a decline, with its trust value decreasing by nearly $16 billion over 68 days.
On the other hand, BlackRock’s iShares Bitcoin Trust has experienced continuous asset growth, now totaling about $17.3 billion. Despite this, Grayscale’s spot Bitcoin ETF has seen withdrawals, with $89.9 million pulled out by investors in the last five days alone, culminating in a total net outflow of $1.6 billion since the start of the year.
The Bitcoin ETF market is witnessing a shift in dominance. Fidelity and BlackRock have rapidly gained market share, injecting $37.3 million and $18.7 million, respectively, into the market in just one week. These inflows have helped address some liquidity issues within the market.
Further, it’s becoming more common for registered investment advisers and multifamily offices to include Bitcoin ETFs in their portfolios, a move described by Horsley as both cautious and strategic. This adoption suggests a growing acceptance of Bitcoin as a viable investment among professional investors.
Recent data highlights the volatility in fund flows. For instance, Grayscale’s Bitcoin Trust reported outflows of $17.5 million on April 10, a sharp drop from $154.9 million the day before. Since January, the average daily outflow has been $257.8 million.
