Author: Sidhartha Shukla, Boomberg; Translated by: Wuzhu, Jinse Finance
U.S. exchange-traded funds that invest directly in bitcoin attracted unprecedented net inflows for 18 consecutive days, as a surge in demand pushed the largest digital asset to a record high.
The group of nearly a dozen products has seen $15.6 billion in net subscriptions and $62.3 billion in total assets as of Thursday since its launch on Jan. 11, according to data compiled by Bloomberg.
Bitcoin pared gains after a report showed U.S. job growth surged in May while the unemployment rate unexpectedly rose, casting mixed signs on the labor market. The largest cryptocurrency was trading around $70,925 as of 8:36 a.m. in New York, while ethereum was little changed at $3,785.
Bitcoin funds from firms like BlackRock Inc and Fidelity Investments were among the most successful debuts in the history of the ETF industry. They took Wall Street by storm and shifted the center of gravity of cryptocurrency from Asia to the United States.
Many speculators in the options market expect Bitcoin to surpass its March all-time high of $73,798 this month, driven by demand for ETFs and expectations of future rate cuts by the Federal Reserve.
“There has been a lot of inflows into spot bitcoin ETFs,” Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors LLC, wrote in a note. “The macroeconomic picture continues to be favorable for cryptocurrencies, with economic growth slowing but not as fast as a recession, and deflationary signs continuing.”
US Bitcoin ETFs see longest streak of daily inflows
Last week, BlackRock Inc.’s $21.4 billion iShares Bitcoin Trust became the world’s largest bitcoin fund, surpassing Grayscale Investments LLC’s $20.1 billion bitcoin trust. The $12.3 billion Fidelity Wise Origin Bitcoin Fund ranked third.
SEC Action
The SEC reluctantly allowed a spot bitcoin ETF in January after a court overturned that ruling in 2023. The agency also unexpectedly moved in May to approve a fund for ethereum, the second-largest token.
The SEC, under Chairman Gary Gensler, has been critical of the digital asset industry’s alleged lack of regulatory compliance. Congress has recently accelerated efforts to provide some legislative clarity for cryptocurrencies.
Ophelia Snyder, president of cryptocurrency ETF provider 21 Shares AG, said institutional and intermediary adoption of digital asset funds is still in its infancy. “The market has a long way to go, we’re still in fairly early stages,” she said on Bloomberg’s Tiger Money podcast, which aired on Tuesday.
Bitcoin prices have more than quadrupled since the start of last year. The surge has brought back memories of a painful 2022 bear market that uncovered fraud and sent once-revered entrepreneurs such as Sam Bankman-Fried to jail.
