With the ongoing surge in Bitcoin’s price, U.S. spot Bitcoin exchange-traded funds (ETFs) have surpassed a significant milestone, accumulating over $100 billion in total net assets. This remarkable growth reflects growing interest and institutional involvement in the cryptocurrency market, particularly in Bitcoin.
Surge in Bitcoin ETF Assets
As of midweek, data from SoSoValue indicates that the 12 spot Bitcoin ETFs together hold assets totaling $100.55 billion, representing about 5.4% of Bitcoin’s overall market capitalization. Leading the charge is BlackRock’s IBIT ETF, which manages an impressive $45.4 billion in assets, followed closely by Grayscale’s Bitcoin Trust (GBTC), boasting $20.6 billion.
All-Time High for Bitcoin
In conjunction with the ETF growth, Bitcoin itself has reached a new all-time high (ATH), trading at approximately $97,094—marking a 3.8% increase in just 24 hours. This remarkable price trajectory is drawing significant attention, as the inflow of capital into Bitcoin ETFs continues to surge. On Wednesday alone, net inflows amounted to $733.5 million, following $837.36 million the day prior.
Noteworthy Inflows and Trading Activity
BlackRock’s IBIT led the inflow rankings, garnering $626.5 million, while Fidelity’s FBTC attracted $133.9 million. Other smaller contributors included Bitwise’s BITB with $9.3 million and Ark and 21Shares’ ARKB with $3.8 million. In contrast, Grayscale’s GBTC reported no new inflows during this period.
Trading volume for Bitcoin ETFs reached $5.09 billion on Wednesday, a slight decrease from Tuesday’s $5.71 billion. This stark disparity highlights the ongoing volatility and investor engagement in the cryptocurrency market.
Concerns Over Ethereum ETF Outflows
While Bitcoin ETFs flourish, spot Ethereum ETFs have encountered challenges with continuous outflows. On Wednesday, a withdrawal of $30.3 million was recorded, marking the fifth consecutive day of negative flows. Additionally, trading volume for Ethereum ETFs fell to $338.3 million, down from $345.1 million the previous day.
Institutional Buying Power and Recent Developments
Gracy Chen, CEO of Bitget, stated that institutional engagement remains a primary driver of Bitcoin’s impressive rise. This week, Bitcoin ETFs have observed a notable net inflow of $1.8 billion, fueled by substantial acquisitions such as MicroStrategy’s recent purchase of 51,000 BTC at $88,617 each. They also announced intentions to raise $2.6 billion to further bolster their Bitcoin holdings.
Moreover, major mining companies are preparing to issue $850 million in convertible bonds to acquire additional Bitcoin, illustrating the robust purchasing power of traditional funds that has significantly contributed to Bitcoin’s rising price.
Market Speculation and Volatility Predictions
The open interest in Bitcoin contracts has surged to $63 billion, with a daily increase of $6 billion. Furthermore, Bitcoin’s implied volatility (IV) has heightened to 60, signifying an increased likelihood of notable price fluctuations in the near future. Chen indicated that short-term investors often opt to lock in profits, which could result in sharp price swings around the critical $100K threshold for Bitcoin.
Bitwise Asset Management Moves Towards Solana ETF
In a parallel development, Bitwise Asset Management has taken initial steps to establish a trust entity for its proposed Bitwise Solana ETF in Delaware. This move reflects the growing demand for crypto-focused investment vehicles. If approved, Bitwise will join other asset managers, such as VanEck and 21Shares, which are also pursuing Solana-focused ETFs.
This filing follows Bitwise’s recent S-1 registration for an XRP ETF, aimed at providing exposure to Ripple’s native cryptocurrency. Bitwise has experienced significant growth in 2024, with its assets under management soaring by 400% year-to-date to reach $5 billion as of October 15.
Notably, Bitwise’s spot Bitcoin ETF, BITB, has attracted considerable attention, accumulating $2.3 billion in net inflows since launch, making it the third largest behind offerings from BlackRock and Fidelity.