- Bitcoin ETFs recorded $555.9 million in inflows on October 14, the highest since June.
- ETFs held 869,000 BTC, about 4% of Bitcoin’s circulating supply.
On October 14, Bitcoin [BTC] ETFs saw record inflows totaling $555.9 million — their largest daily net inflow since June, according to Farside Investors.
This rise in ETF interest coincided with BTC hitting a two-week high. The coin was trading at $66,500 at press time.
Fidelity’s FBTC led the charge, logging an impressive $239.3 million, marking its highest inflow since June 4.
Other notable ETFs included Bitwise’s BITB with inflows of $100.2 million, BlackRock’s IBIT at $79.5 million and Ark 21Shares’ ARKB at just under $69.8 million.
Grayscale’s GBTC had its first inflow in October with $37.8 million, the largest since May.
Execs weigh in…
ETF Store President Nate Geraci noted the same,
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 around 646,000 BTC, with GBTC adding 223,000 BTC to the total.
These funds control 869,000 BTC, about 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. Commenting on the matter, Bloomberg’s Eric Balchunas said,
Source: Eric Balchunas/X
Lingering worries
However, despite recent growth, BTC ETFs represent only a small portion of the overall Bitcoin trading landscape.
According to Checkonchain data as of October 11, the Bitcoin Futures market recorded $53.4 billion in trades, with the spot market reaching $4.5 billion.
In contrast, ETF trades totaled only $2 billion, capturing approximately 3% of the day’s total BTC market volume.
This small fraction demonstrates the infancy of ETFs in the larger Bitcoin market ecosystem.
Well, it’s also because it remains challenging to determine the exact proportion of ETF inflows driven by the “basis trade,” or cash and carry trade.
Major players in the ETF market
Large institutions such as Goldman Sachs and Jane Street Capital are engaged in creating and redeeming ETF shares, which stabilizes the ETF’s price and liquidity.
Hedge funds, such as Millennium Management and Capula Management, employ “basis trading” strategies to take advantage of discrepancies between Bitcoin’s spot and futures prices.
However, not all large owners engage in basic trading.
For example, the state of Wisconsin Investment Board holds the ETF for portfolio diversification purposes.
Still, Bernstein, a private wealth management firm, suggests that basis trading could act as a “Trojan horse” for wider adoption, as increased 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 will attract more sophisticated investors.
And to 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.