- Bitcoin ETFs recorded inflows of $555.9 million on October 14, the highest since June.
- ETFs hold 869,000 BTC, approximately 4% of Bitcoin’s circulating supply.
On October 14, Bitcoin [BTC] ETFs saw record inflows, totaling $555.9 million – the largest daily net inflows since June, according to Farside Investors.
This surge in ETF interest coincided with BTC hitting a two-week peak. The coin was trading for $66,500 at the time of writing.
Fidelity’s FBTC led the charge, recording an impressive $239.3 million, marking the highest inflows since June 4.
Other notable ETFs included Bitwise’s BITB with inflows of $100.2 million, BlackRock’s IBIT of $79.5 million, and Ark 21Shares’ ARKB with just under $69.8 million.
Grayscale’s GBTC had its first inflow in October, with $37.8 million, the largest since May.
Managers weigh in…
ETF Store President Nate Geraci noted the same about this:
Source: Nate Geraci/X
Since their debut in January, BTC ETFs have amassed a remarkable net inflow of $18.9 billion.
Excluding GBTC, the nine new Bitcoin ETFs held approximately 646,000 BTC, with GBTC adding 223,000 BTC to the total.
These funds control 869,000 BTC, approximately 4% of Bitcoin’s circulating supply.
This year has seen remarkable growth in the ETF sector, with around 2,000 launches. This includes top funds such as BlackRock and Fidelity. Bloomberg’s Eric Balchunas said:
Source: Eric Balchunas/X
Persistent concerns
However, despite recent growth, BTC ETFs represent only a small portion of the overall Bitcoin trading landscape.
According to Checkonchain data from October 11, the Bitcoin Futures market recorded $53.4 billion in transactions, while the spot market reached $4.5 billion.
In contrast, ETF trades totaled just $2 billion, representing about 3% of the day’s total BTC market volume.
This small fraction shows that ETFs are still in their infancy in the larger Bitcoin market ecosystem.
This is also because determining the exact proportion of ETF inflows resulting from ‘basic’ or cash-and-carry trading remains a challenge.
Major players in the ETF market
Major institutions such as Goldman Sachs and Jane Street Capital are in the business of creating and redeeming ETF shares, which stabilizes the price and liquidity of the ETF.
Hedge funds, such as Millennium Management and Capula Management, use ‘basic trading’ strategies to profit from discrepancies between Bitcoin’s spot and futures prices.
However, not all major holders engage in basic trading.
For example, the State of Wisconsin Investment Board holds the ETF for purposes such as portfolio diversification.
Still, Bernstein, a private asset management firm, suggests that basic trades could act as a “Trojan horse” for wider adoption, as greater liquidity and trading volume could encourage investors to take long-term positions in Bitcoin.
What’s next?
Therefore, if options linked to IBIT are approved and physically settled, it would attract more sophisticated investors.
And for that, strategies like covered calls (selling call options while holding the underlying asset) would allow investors to generate passive income, while miners could use these options to hedge their holdings.
Together, these elements could bring more maturity and volume to the Bitcoin ETF market.