The world of crypto-currencies is constantly evolving, and the latest news to cause a stir is the entry onto the scene of exchange-traded funds (ETFs) specialising in Bitcoin. These "Newborn Nines", as they are known, recently made a spectacular breakthrough, with the collective acquisition of 95,000 BTC, raising their asset management to an impressive nearly $4 billion.
Growing interest in digital assets
Bloomberg ETF analyst Eric Balchunas highlighted the remarkable influx of capital, which highlights investors' growing appetite for digital assets and the increasing acceptance of cryptocurrencies in traditional finance. Contrary to the usual trend of ETFs seeing their trading volumes decline after launch, the 'Newborn Nine' saw record volumes, with a 34% increase on the fifth day of trading.
The movement's leaders
- BlackRock's IBIT and Fidelity's FBTC: These funds are leading the growth with over $1.2 billion in inflows each, holding just over 30,000 Bitcoins each.
- Invesco and VanEck: Invesco attracted more than $63 million on 19 January, while VanEck passed the $100 million mark in AUM.
- Valkyrie Investments and Franklin Templeton: They recorded $71.7 million and $48.6 million respectively in AUM.
A change in investor preference
This inflow into newly launched Bitcoin ETFs was faster than outflows from the Grayscale Bitcoin Trust (GBTC), which saw its AUM fall by $2.8 billion over the same period. This indicates a shift in investor preference towards new ETFs, which offer regulatory clarity and ease of access.
Conclusion: a success despite Bitcoin's volatility
Despite the volatile nature of Bitcoin, which saw a massive sell-off during this period, these ETFs have been remarkably successful, attributed in part to the redirection of outflows from GBTC into these new Bitcoin cash ETFs. The cryptocurrency market continues to evolve, and the entry of the Bitcoin ETFs marks a decisive turning point, testifying to the growing interest of institutional investors in this space.
