David Edwards
On May 21, BlackRock’s iShares Bitcoin Trust (IBIT) saw $530.6 million, the largest one-day inflow in more than two weeks. The spike coincides with Bitcoin’s continued fast price rise, which has brought it close to $112,000 and sparked a resurgence of institutional interest in spot Bitcoin ETFs located in the United States.
IBIT’s most recent inflow is the biggest since May 5, when it brought in $531.2 million, according to statistics from Farside Investors. Interestingly, since April 9, there have been no outflows from the fund. IBIT showed that institutional hunger substantially outpaced daily Bitcoin production by acquiring 4,931 BTC in a single day, which is more than ten times the 450 BTC produced over the same timeframe.
IBIT also saw its largest trading volume since January, according to market observers. Nate Geraci, president of the ETF Store, stated that additional inflow increases are probably in store given the trading activity.
The day’s total net inflows for all 11 U.S. spot Bitcoin ETFs came to $607.1 million. IBIT was followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC), which saw net inflows of $23.5 million. The market action, according to Bloomberg ETF analyst Eric Balchunas, is a “classic feeding frenzy,” evoking trading volumes that were last observed in January, when Bitcoin reached its previous all-time high.
Bitcoin extended its climb and strengthened optimistic mood as it reached a high of around $111,897 on Coinbase as of early May 22 trading. As investor confidence in digital assets as a hedge against macroeconomic risks grows, so does the demand for Bitcoin ETFs.
Investors are “crowding into Bitcoin ETFs,” according to Jeff Mei, Chief Operating Officer of cryptocurrency exchange BTSE, which saw net inflows of $3.6 billion in May alone. Mei anticipates that this momentum will continue, particularly if the Fed suggests a rate drop in the upcoming months.
Jupiter Zheng, a partner at HashKey Capital, stated that Bitcoin is now in “uncharted price discovery territory” following its breakout above $110,000. He continued by saying that more investors are beginning to see Bitcoin as a long-term value proposition as a result of unstable macroeconomic conditions and uncertain geopolitical situations.
