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BlackRock Bitcoin ETF Sees Record $750 Million Inflows – What’s Going On?

BlackRock’s Bitcoin ETF, IBIT, continues to break records, with Tuesday alone seeing a staggering $788.3 million in inflows from investors.

These funds are immediately utilized to purchase more Bitcoin (BTC), which BlackRock holds in custody with Coinbase, directly backing its shares. Remarkably, less than two months since its launch, BlackRock has amassed over $9.1 billion in net flows and now holds $11.4 billion worth of BTC on behalf of its clients.

BlackRock’s Bitcoin ETF Dominance

IBIT now holds the 2nd position among all ETFs in terms of 1-day flow, 1-week flow, 1-month flow, and ranks 3rd in year-to-date flows,” stated Bloomberg ETF analyst Eric Balchunas in a Tuesday post.

As the preferred Bitcoin ETF in the market, IBIT has surpassed various metrics, marking one of the most successful ETF launches to date.

Tuesday also witnessed a historic day for ETF trading volume, with Bitcoin funds collectively handling $10 billion in volume.

While Bitcoin briefly reached a new all-time high of $69,200 on Tuesday before retracing to $61,000, it currently hovers around $67,000 as of Wednesday, reflecting a 51% increase year-to-date.

Analysts have different perspectives on the source of ETF demand. While initial assumptions pointed to institutional buyers, Bitwise CIO Matt Hougan suggested on Tuesday that corporations and major wirehouses have yet to fully engage in the market, with much of the current demand stemming from retail investors.

Despite a $332.5 million outflow from the Grayscale Bitcoin Trust (GBTC), net inflows to Bitcoin ETFs yesterday totaled $648 million, marking the second-largest inflow to date.

Balchunas noted, “This gives us a small taste of how ETF investors could potentially hold onto their investments better than some anticipate.”

Why Bitcoin ETFs Are So Successful

During a recent interview at the Madeira Bitcoin conference, Bitcoin billionaire Michael Saylor expressed astonishment at the success of the Bitcoin ETF, stating that it has exceeded his initial expectations.

“We initially viewed Bitcoin as a potential rival to gold, but it has not only competed but has risen through the ranks, now challenging the S&P 500 Index ETFs,” he remarked.

Saylor predicts that Bitcoin ETFs will soon surpass gold ETFs in terms of assets under management (AUM), positioning Bitcoin as the largest commodity ETF in the United States.

“These ETFs have opened up a whole new financial landscape, providing awareness, opportunities, and functionality to the 99% of mainstream investors,” he emphasized.

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