Key Points
- Bitcoin ETFs saw record inflows of $555.9 million on October 14th, the largest since June.
- The ETFs now hold around 869,000 BTC, which is approximately 4% of Bitcoin’s circulating supply.
Bitcoin ETFs experienced a significant increase in inflows on October 14th, reaching a total value of $555.9 million.
This is the largest daily net inflow since June, as reported by Farside Investors.
The increase in ETF interest occurred simultaneously with Bitcoin (BTC) reaching a two-week high, trading at around $66,500.
Leading ETFs
Fidelity’s FBTC was the leading ETF, registering an impressive inflow of $239.3 million, which is its highest since June 4th.
Other notable ETFs included Bitwise’s BITB with inflows of $100.2 million, BlackRock’s IBIT at $79.5 million, and Ark 21Shares’ ARKB with just under $69.8 million.
Grayscale’s GBTC also experienced its first influx in October, at $37.8 million, the largest since May.
Since the beginning of the year, BTC ETFs have accumulated a significant $18.9 billion net inflows.
Excluding GBTC, the nine new Bitcoin ETFs owned around 646,000 BTC, with GBTC adding 223,000 BTC to the total.
ETF Sector Growth
This year has witnessed substantial growth in the ETF sector, with approximately 2,000 launches.
This includes major funds like BlackRock and Fidelity.
Despite the recent growth, BTC ETFs only represent a small portion of the total Bitcoin trading landscape.
According to Checkonchain data as of October 11th, the Bitcoin Futures market recorded $53.4 billion in trades, with the spot market reaching $4.5 billion.
Major institutions such as Goldman Sachs and Jane Street Capital are involved in creating and redeeming ETF shares, which helps in stabilizing the ETF’s price and liquidity.
Hedge funds like Millennium Management and Capula Management use “basis trading” strategies to profit from differences between Bitcoin’s spot and futures prices.
However, not all large holders engage in basis trading.
For instance, the State of Wisconsin Investment Board holds the ETF for purposes like portfolio diversification.
If options tied to IBIT are approved and physically settled, it could attract more sophisticated investors.
Strategies like covered calls would allow investors to generate passive income, and miners could use these options to hedge their holdings.
These factors could contribute to more maturity and volume in the Bitcoin ETF market.