A new batch of U.S. Bitcoin exchange-traded funds (ETFs) are attracting strong interest from investors, although it’s unclear whether they will be able to maintain the pace of inflows in the coming weeks. Investors poured $1.9 billion into nine new exchange-traded funds tracking Bitcoin’s spot price in the first three days of trading, with fund giants BlackRock and Fidelity accounting for the lion’s share of the money, according to issuer and analyst data.
Flows to these nine funds exceeded inflows following the launch of the ProShares Bitcoin Strategy ETF, which attracted a record $1.2 billion in its first three days of launch in 2021. The SPDR GoldShares ETF attracted $1.13 billion in its first three days after its launch in 2004.
The funds launched on January 11, a day after receiving approval from the U.S. Securities and Exchange Commission (SEC). Still, investment in the long-awaited ETF remains billions of dollars below even the most aggressive estimates.
Market participants expressed the extent to which funds tracking the notoriously volatile cryptocurrency continue to attract retail and institutional investors. Some bullish analysts have said inflows could reach $50 billion-$100 billion by the end of the year.
"So far, these offerings have almost lived up to the hype," said Todd Sohn, an ETF analyst at Strategas. "The next question is: What is their staying power?" , what will these flows look like in 6 months or 6 years? "
For now, lower fees and visibility appear to be key factors in attracting investors. Asset management giant BlackRock’s iShares Bitcoin Trust ETF has attracted more than $700 million, while Fidelity’s Wise Origin Bitcoin Fund has surpassed $500 million, according to cryptocurrency research and analytics firm BitMEX Research.
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