- Despite FOMC warnings, BTC ETFs show resilience with ongoing net inflows
- Bitcoin ETFs viewed as institutional assets are poised for growth amid evolving regulations
In a recent turn of events, Federal Open Market Committee (FOMC) members advocated for patience regarding interest rate cuts and issued warnings about persistent inflation leading to a decline in U.S equity markets.
Despite this, the Bitcoin [BTC] spot ETF market has continued to see net inflows, indicating resilience in the cryptocurrency market amidst broader economic concerns.
Echoing similar sentiments, Bloomberg Intelligence’s Senior ETF analyst Eric Balchunas noted,
“The vast majority of the 40% gains in Bitcoin since ETF launch have been after hours with huge price gaps forming bt close and open.. great chart showing the intra-day vs after hours return for $IBIT from @psarofagis.”
ETF market inflows surge
According to BitMEX’s research report, BTC spot ETF market net inflows surged from $40.2 million on 2 April to $113.2 million on 3 April.
Leading the influx was the Fidelity Wise Origin Bitcoin Fund (FBTC), which saw net inflows of $116.7 million on 3 April. Additionally, the Bitwise Bitcoin ETF (BITB) noted net inflows of $22.6 million over the same period.
Remarking on the same, Hunter Horsley, Founder & CEO of Bitwise Asset Management, in a recent conversation with Anthony Pompliano at the Bitcoin Investor Day’s event in New York, claimed,
“Bitwise strives to be a little bit like the teaching assistant for crypto.”
He further said,
“I also think ETFs being approved and BlackRock coming in means that it’s not going to zero.”
Additionally, Matt Hougan, CIO of Bitwise Asset Management, highlighted how ETF approval, which was initially limited to retail investors and independent advisors, has gradually expanded to larger institutions, reaching its peak inflows in 2020 – 16 years later.
ETF expansion amid regulatory evolution
Despite limited adoption in U.S wealth management, optimism remains for ETF expansion as regulations evolve. In fact, according to analysts, Bitcoin ETFs offer a simplified investment route, avoiding operational complexities.
According to Horsley,
“I don’t think it’s unreasonable to think you know there could be multiple hundreds of billions of dollars in these ETFs and allocation sizes could be you know between 1% and 5% and maybe scaling as the asset matures.”
He went on to conclude by saying,
“This is not the Bitcoin of yesterday year, this is now considered an institutional asset.”
With Bitcoin’s spot ETF market anticipating sustained net inflows, the upcoming U.S Jobs Report could still shape investor sentiment towards BTC. Additionally, with Bitcoin’s halving on the horizon, sustained demand through the ETF market could help stabilize the cryptocurrency’s price after the same.