GBTC outflows slow as newborn nine ETFs gain momentum

Trading for spot Bitcoin ETFs in the United States has brought forth impressive results. Bloomberg analyst Eric Balchunas has reported the latest data for day four of the spot Bitcoin ETFs, highlighting the remarkable performance of the recently approved spot Bitcoin ETFs, collectively referred to as the “Newborn Nine” (excluding Grayscale, which converted its GBTC Trust into an ETF).

Newborn Nine Bitcoin ETFs gain momentum

The Newborn Nine spot Bitcoin ETFs saw substantial growth in rolling net flows, reaching an impressive $1.2 billion. This comes after the Newborn Nine attracted $914 million on their best day yet, far surpassing the $450 million outflow from Grayscale’s GBTC. 

In just the first days of trading, these ETFs have garnered $3 billion in investments and traded $5.4 billion, marking unusually high numbers in the cryptocurrency market.

One standout among the Newborn Nine is BlackRock’s IBIT, which has now amassed over $1 billion in assets under management (AUM), totaling $1.081 billion. Following closely behind is Fidelity’s FBTC with $882.3 million in AUM and Bitwise’s BITB with $373.3 million.

ETFs reshape the crypto landscape

It’s important to note that the success of these spot Bitcoin ETFs does not solely indicate a shift of capital from Grayscale’s GBTC. Balchunas emphasized that this movement of funds from higher-cost investment options to ETFs is a common phenomenon. ETFs have a history of attracting investments away from high-cost mutual funds, leading to their growth and popularity among investors. 

This trend is expected to continue, with the Newborn Nine poised to compete with other high-cost investment products.

Analyzing the influx of investments, Balchunas suggested that the significant inflow into IBIT on day four may have been driven by large custom creations, potentially indicating substantial transactions by institutional investors. 

This growing interest from institutional players further underscores the acceptance of Bitcoin and cryptocurrency as an asset class.

Spot BTC ETFs among top ETF launches

The success of the spot Bitcoin ETFs extends beyond their own market segment. After just four days of trading, two of them have already secured spots in the top 5, and three are in the top 10 of the most successful ETF launches. 

The only ETFs with higher AUM in their first week are the iShares Core S&P 500 ETF (IVV), Invesco Trust Series 1 (QQQ), and Vanguard 500 Index Fund ETF (VOO).

While the Newborn Nine spot Bitcoin ETFs continue to gain momentum, there has been a noticeable reduction in the selling pressure on Grayscale’s GBTC. Alex Thorn, Head of Research at Galaxy, reported that Grayscale transferred 9,839 BTC (equivalent to $417 million) to Coinbase Prime to settle redemptions, down from the 18,000 BTC (worth $770 million) transferred the previous day. 

This decrease in outflows is significant, as GBTC has experienced substantial redemptions since the regulatory approval of the new ETFs.

However, it remains to be seen if GBTC’s sales will continue to slow down in the coming days and weeks. While the inflows into the Newborn Nine spot Bitcoin ETFs have compensated for the selling pressure on GBTC, the Bitcoin price has remained relatively stable, hovering below $43,000 over the past few days.

BlackRock’s IBIT gains ground on Grayscale

Crypto analyst James Van Straten provided an intriguing perspective on the rate at which BlackRock’s IBIT is acquiring Bitcoin compared to Grayscale’s outflow. He noted that at the current pace, IBIT could surpass GBTC in terms of Bitcoin holdings in just 37 days. BlackRock’s IBIT would have approximately 256,936.75 BTC, exceeding Grayscale’s projected holdings of around 247,813.95 BTC.