BlackRock and Fidelity's spot Bitcoin ETFs entered the top 10 in net asset flows for all ETFs in January, according to a recent report from US financial services firm Morningstar.
That's an impressive feat when you consider that neither ETF is available to investors for the entire month. Each fund, iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC), began trading on January 11. This means they each had 14 total trading days.
BlackRock's IBIT accounted for $2.7 billion in net asset inflows and Fidelity's FBTC accounted for $2.3 billion. Net assets means that Morningstar's calculation accounts for deposits and withdrawals in January.
Remember that BlackRock, the world's largest asset manager, has a large ETF business. Although IBIT didn't make the top 10, it had five other funds in the running — including the iShares Core S&P 500 ETF.
According to Eric Balchunas, an analyst at Bloomberg Intelligence, there were signs that BlackRock and Fidelity ETFs were performing well for the rest of their season—crypto and otherwise.
Another way to put bitcoin ETF flows in ETF context (besides showing their #s relative to past new launches) is how flows from the last 1 weeks stack up to ALL ETFs. Even after four days, two are in the top 5 and three are in the top 10, where $VOO, $QQQ and more. pic.twitter.com/oduhktEqwG
— Eric Balchunas (@EricBalchunas) January 18, 2024
The performance is even more impressive when you consider how quickly pre-certification can evaporate around Bitcoin ETFs. On the day they started trading, the price of BTC rose to $48,494.62. But after that peak — and less than two weeks later — the price had slipped to $38,678.19 on January 23.
Because when ETFs started trading and the Greyscale Bitcoin Trust (GBTC) converted to a spot ETF, it opened up previously locked-up shares and put them up for sale. The resulting selling pressure caused Bitcoin to lose all ETF gains.
In fact, grayscale took off its own super-investment: GBTC saw the second-highest inflows of any ETF in January, with $5.7 billion worth of shares sold into the Bitcoin ETF after the deal.
Figure: Snapshot of Morningstar rating of ETFs for income streams in January 2024.
It is a bitter outcome. Some analysts say none of the others would have been approved if Grayscale hadn't sued and won a ruling over the U.S. Securities and Exchange Commission's refusal to consider its ETF application.
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