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Crypto Mania Pushes BlackRock Bitcoin ETF Record $520 Million in Single Day
(Bloomberg) — Add this eye-popping statistic to the list of superlatives driving the latest cryptocurrency boom cycle: A record $520 million flowed into BlackRock Inc.’s Bitcoin ETF in a single day.
The iShares Bitcoin Trust (ticker IBIT) posted its biggest gain in a session on Tuesday, marking the biggest daily inflow so far among the group of new U.S. exchange-traded funds that invest directly in the world’s largest cryptocurrency. It was also the second-largest daily addition for any U.S. ETF across all asset classes, data compiled by Bloomberg showed. And the trading mania continued into Wednesday.
As Bitcoin surpasses $60,000 and heads for a new record high, the influx of liquidity into BlackRock’s fund helps explain the digital asset’s notable rally this year. Just as ETF advocates predicted, their arrival last month opened the door to new investments, giving asset managers, hedge funds and everyday investors a new avenue to sink capital across the asset class.
“The rally appears to be primarily influenced by BTC ETFs,” said Stephane Ouellette, managing director of FRNT Financial, an institutional platform focused on digital assets. “Some estimates suggest that fewer than 20% of investment advisors have been approved by their firms to involve their clients in the product. This is a process that will likely take place over the course of a year.”
Bitcoin advanced for a fifth straight day, pushing the price of the oldest cryptocurrency to two-year highs and putting it within sight of its all-time high of nearly $69,000. The gains helped fuel a broad rally in digital assets, with activity so frenetic it triggered a wave of disruptions at cryptocurrency exchange Coinbase Global Inc.
Year to date, Bitcoin is up more than 45%, making it one of the best assets of any asset type, even after last year’s surge. The new funds played a critical role, and the anticipation of their approval helped fuel the 2023 advancement.
Bitcoin hitting two-year highs “will further inspire ETF selling as a fundamental threshold,” wrote strategists at JPMorgan and Chase, including Kenneth Worthington.
In line with Bitcoin’s recent gains, the $6.5 billion IBIT has seen 32 consecutive days of inflows. Close behind is Fidelity Wise Origin Bitcoin Fund (FBTC), which has also seen daily inflows since its launch. The Fidelity fund has attracted net inflows of $4.48 billion since its inception.
The inflows highlight the growing – and continuing – appetite for spot Bitcoin ETFs. The trend also highlights the ease of trading assets via ETFs designed to track them and why investors have long pushed for Bitcoin funds.
As of midday Wednesday, nine of the Bitcoin ETFs – excluding the Grayscale Bitcoin Trust (GBTC) – had combined daily trading volume of well over $2.6 billion, with IBIT again breaking its record with 1.5 billions of dollars traded, according to data compiled by
Eric Balchunas of Bloomberg Intelligence. That IBIT is seeing the most activity isn’t that surprising, given its dominant position in the industry, said Jim Bianco of Bianco Research.
The flows are “definitely” driven by retail traders, he said by phone. “Flows drive price.”
(Corrected: An earlier version of the web headline for this story has been updated to show the correct dollar figure.)
More stories like this can be found at Bloomberg.com
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