Spot Bitcoin ETFs See Rebound

After four weeks of sustained outflows totaling over $1 billion, spot bitcoin exchange-traded funds (ETFs) in the United States have finally seen a return to net inflows, amassing $116.8 million last week. This marked change was led predominantly by Fidelity’s FBTC and Ark Invest’s ARKB, signaling a potential shift in investor sentiment towards these investment vehicles.

Despite the general uptrend, Grayscale’s Bitcoin Trust, which traditionally held a significant position in the market, experienced net outflows, losing $171.1 million. However, this fund did manage to break a 78-day streak of outflows with notable inflows earlier in the week, suggesting mixed investor reactions.

Fidelity’s FBTC was the standout performer, with substantial net inflows of $111.3 million, closely followed by Ark Invest’s ARKB, which added $82.8 million. BlackRock’s IBIT, though quieter in recent times, also contributed positively with $48.1 million in net inflows. Collectively, these movements have pushed the total net inflows for spot bitcoin ETFs to an impressive $11.7 billion to date.

Interestingly, while the U.S. spot bitcoin ETFs have seen this reversal, the overall trading volume has decreased, sliding down to $7.4 billion from a higher activity level in previous weeks. This decline in volume is consistent across the global crypto exchange-traded product (ETP) market, which also experienced a drop to $8 billion last week from an April average of $17 billion.

James Butterfill, Head of Research at CoinShares, highlighted that ETP investors are currently less active within the crypto ecosystem, representing only 22% of total volumes on trusted global exchanges, a decrease from 31% the previous month.

This decline in trading volumes coincides with a significant downturn in bitcoin’s price, which plummeted 23% from its all-time high in March before making a modest recovery. Current trading levels hover around $62,700, still below the peak but indicating some resilience.

The recent uptick in inflows into spot bitcoin ETFs, contrasted with the downward trend in ether-based products—which saw $14 million in outflows—suggests that investors might be cautiously optimistic about the future of bitcoin ETFs despite previous setbacks. However, the long-term trend for these products remains uncertain, particularly with ongoing regulatory hesitations around spot ether ETFs in the U.S.

This situation continues to unfold as the market watches for signs of either a sustained recovery or further fluctuations that could influence the trajectory of cryptocurrency investment products.