Approximately $900 million in net inflows in 3 days – Bitcoin ETF, is the start a success or failure | CoinDesk JAPAN (CoinDesk Japan)

As of the close of trading on January 16th, the Bitcoin Spot ETF approved in the United States has been in operation for three full days, with net inflows of 21,000 Bitcoins (BTC) and approximately $894 million (approx. 1 billion yen (exchanged to 148 yen to the dollar). Bitcoin is worth $42,600 at the time of writing this article.

BlackRock’s iShares Bitcoin Trust (IBIT) topped the list with 16,362 BTC, followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with 12,112 BTC. Significant outflows from Grayscale Bitcoin Trust (GBTC), which lost around 25,000 BTC, reduced net inflows.

GBTC existed as a closed-end fund until the U.S. Securities and Exchange Commission (SEC) approved a Bitcoin spot ETF last week. It was converted to an ETF with the launch of Bitcoin spot ETFs such as BlackRock. Before the ETF was approved, GBTC charged customers a 2% management fee and had an operating balance of approximately 630,000 BTC.

After the ETF conversion, GBTC’s management fee was lowered to 1.5%, but it is still at least 1% higher than its rivals. Additionally, ETF conversion means that GBTC no longer trades at a discount to its net asset value (NAV). This means that holders who bought GBTC at a discount have an incentive to sell, and the current outflow shows that this is happening.

However, new inflows into Bitcoin ETFs exceeded this, resulting in net inflows overall.

Bitcoin’s price movements have subsided significantly this week, mainly moving in the range of $42,000 to $43,000. At the time of writing, it was down just over 1% in 24 hours, even lower than the 0.6% drop in the CoinDesk 20 Index, which tracks the world’s largest and most liquid crypto assets.

Is Bitcoin ETF a success or failure?

Now, many people’s attention has shifted to whether the Bitcoin ETF’s launch was a success or a failure. Eric Balchunas, an ETF analyst at Bloomberg Intelligence, called it a huge success, pointing to $10 billion in trading volume in the first three days. He said 500 ETFs were launched in 2023, but their total trading volume for the year was only $450 million.

Failureists point out the poor price movement after the start (Bitcoin is down nearly 10%), the large proportion of GBTC sell-offs, and the initial net inflows, although significant, are few and far between. This is far short of the bullish forecast of 1 billion.

The late Richard Russell, editor of Dow Theory Letters, said, “The market creates the opinion.” If Bitcoin breaks through $50,000 this year and challenges its all-time high of over $65,000, the Bitcoin ETF will be considered a huge success.

｜Translation/Editing: CoinDesk JAPAN Editorial Department
｜Image: iShares Bitcoin Trust website (capture)
｜Original text: Bitcoin ETF Net Inflows Near $1B After Three Days