BlackRock Spot Bitcoin ETF Sees Initial Flows Amid BTC Price Decline

Bitcoin exchange-traded funds (ETFs) in the United States have recently seen a remarkable trend of six consecutive days of inflows. In particular, BlackRock's IBIT ETF experienced outflows for the first time just yesterday.

Bitcoin is down 11% this week in its most challenging month since the 2022 FTX crash.

Record the flow of costs and market failure

BlackRock's Bitcoin Fund saw its first outflow of $36.9 million on May 1, while nine other ETFs recorded inflows of $526.8 million on the same day, according to data from Farside Investors.

The largest outflow of the day was seen in the Fidelity Wise Origin Bitcoin Fund (FBTC), which saw a net outflow of $191.1 million. Grayscale Bitcoin Trust (GBTC) followed closely behind with a cost of $167.4 million.

ARK 21Shares and Franklin Bitcoin ETFs saw outflows of $98.1 million and $13.4 million, respectively, contributing to the largest single day inflows for US spot Bitcoin ETFs.

In a broader market scenario, data from CoinGecko indicates that bitcoin prices have fallen more than 10% this week. BTC and the broader crypto market are poised to snap seven-month gains following Tuesday's decline, marking their biggest monthly decline since November 2022, when crypto exchange FTX fell.

Bitcoin was down more than 16 percent at the end of April, while Ethereum was down 18 percent. Smaller cryptocurrencies experienced higher declines, with popular altcoins such as SOL, Dogecoin (DOGE) and Avalanche (AVAX) dropping 35% to 40% in April.

Overall, the total market capitalization of the cryptocurrency market fell by about 18 percent, marking the biggest decline since June 2022.

Analysts weigh in.

Despite these challenges, Bloomberg ETF analyst James Seyfart says his position that Bitcoin ETFs are “running smoothly across the board,” emphasizing that inflows and outflows are part of the ETF's lifecycle.

It should be added – these ETFs are performing flawlessly across the board. Inflows and outflows are a normal part of an ETF's life.

— James Seyff (@JSeyff) May 2, 2024

Echoing this sentiment, ETF Store President Nate Geraci emphasized that such fluctuations are normal for ETFs.

He pointed out that the metal's price is up 16 percent year-to-date, compared to flows seen in traditional assets such as gold ETFs. This year, the iShares Gold ETF and SPDR Gold ETFs have seen outflows of $1 billion and $3 billion, respectively.