Bitcoin ETFs Near Million-Token Milestone as BlackRock Leads Surge in Inflows

TLDR:

BlackRock’s IBIT leads Bitcoin ETF inflows with $482 million over two days (Oct 23-24, 2024)
Total Bitcoin ETF holdings approaching 1 million BTC, nearing Satoshi’s 1.1 million
ETFs saw $2.1 billion in inflows last week, strongest since March
Some analysts warn large inflows historically precede price declines
BlackRock’s IBIT holds 396,922 BTC, making it the third-largest Bitcoin holder after Satoshi and Binance

The U.S. spot Bitcoin ETF market continues to demonstrate robust growth in October 2024, with total holdings approaching the milestone of 1 million Bitcoin tokens. This development comes as BlackRock’s iShares Bitcoin Trust (IBIT) maintains its position as the dominant force in the market.

Recent data from Farside Investors shows that Bitcoin ETFs recorded substantial net inflows of $380 million over just two days, with IBIT capturing the majority share. On October 23, the market saw a net inflow of $192.4 million, followed by an additional $188 million the next day.

BlackRock’s IBIT has emerged as the clear market leader, attracting $317.5 million in new investments on October 23 alone. The fund continued its strong performance the following day with an additional $165.5 million in inflows, bringing its total Bitcoin holdings to 396,922 BTC.

The current combined holdings of U.S. spot Bitcoin ETFs stand at approximately 967,459 tokens, positioning these investment vehicles to soon surpass the symbolic threshold of 1 million Bitcoin. This figure approaches the estimated 1.1 million Bitcoin held by Bitcoin’s pseudonymous creator, Satoshi Nakamoto.

In the broader market context, Binance currently holds second place with 636,000 BTC as of October 1, according to their Proof of Reserves, though most of these holdings are believed to be customer assets rather than proprietary holdings.

Last week marked a particularly strong period for ETF inflows, with funds accumulating $2.1 billion, representing the highest weekly inflow since March. October 14 saw single-day inflows exceed $555 million, matching levels not seen since early June.

However, the market has shown some mixed signals. While IBIT continues to attract substantial investment, other funds have experienced varying results. ARK’s Bitcoin ETF (ARKB) recorded significant outflows of $99 million on October 23, while Bitwise’s BITB demonstrated volatility with an outflow of $25.2 million followed by an inflow of $29.6 million the next day.

This surge in ETF activity follows a notable seven-day inflow streak totaling over $2.4 billion between October 14 and October 21. The streak was temporarily interrupted by a net outflow of $79.1 million on October 22.

The success of these ETF products, particularly IBIT, has drawn attention from market analysts. Nate Geraci, President of the ETF Store, noted that IBIT’s performance would place it in the top 10% of all ETF launches in 2024, among more than 575 products.

Some market observers have raised cautionary notes about the unusually large inflows. Shubh Varma, CEO of Hyblock Capital, pointed to historical patterns where similar periods of large inflows were followed by price corrections.

The current Bitcoin price stands near $68,000, marking a three-month high. The cryptocurrency market has shown increased activity in the lead-up to the U.S. presidential election, with some analysts attributing recent price movements to political factors.

Grayscale’s Bitcoin fund has shown relatively modest activity, recording a minor outflow of $7.1 million on October 24, indicating varying investor preferences among the available ETF options.

The cumulative flows into spot Bitcoin ETFs since their January 2024 launch have now reached approximately $21.41 billion, highlighting the significant role these investment vehicles have come to play in the cryptocurrency market.

Options traders on the Deribit exchange are showing optimism about Bitcoin’s near-term price prospects, with positions suggesting expectations of $80,000 per Bitcoin by late November, following the U.S. presidential election.