Bitcoin
Is the Bitcoin ETF rally over? By Investing.com
the price has more than doubled since the batch of cash exchange-traded funds (ETFs) began trading in the US in January.
Demand from these regulated vehicles was so intense that the original cryptocurrency reached a new all-time high, driven by a flood of Bitcoin purchases.
However, it appears the market may have gotten a little ahead of the hype, according to Kaiko Research, as investors sold crypto ETFs at the fastest pace last week.
Both ETF inflows and Bitcoin’s (BTC) recovery slowed in early April. Last week, BlackRock’s (NYSE:) iShares Bitcoin Trust (IBIT) recorded its first daily outflow of $37 million, breaking a 71-day streak of consecutive inflows.
On Friday, however, the tide appeared to turn, with strong inflows into several ETFs, including Grayscale’s GBTC. Additionally, BlackRock’s IBIT fund is currently close to parity with GBTC in terms of holdings. Kaiko analysts attribute this rebound in ETF flows to US employment data, which has sparked speculation about interest rate cuts by the Federal Reserve.
Globally, competition between ETFs is heating up. Last week, three mainland Chinese asset managers – Bosera Asset Management, Harvest Global Investments and China Asset Management – launched Bitcoin (BTC) and (ETH) spot ETFs in Hong Kong.
The first day of trading saw a combined volume of US$12.7 million between the Hong Kong Dollar, US Dollar and U.S. Dollar trading pairs.
While this volume is modest compared to the $4.6 billion traded by US spot ETFs at their launch, it highlights the relatively smaller scale of the Hong Kong ETF market.
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“Interestingly, ChinaAMC’s Bitcoin ETF had the strongest volume despite its higher fee of 99 basis points. ETH ETFs attracted 23% of total first-day volume, while BTC accounted for the majority at 77%,” says Kaiko’s note.
In the Asia-Pacific region, demand for exposure to cryptocurrencies remains strong. According to recent mandatory 13F filings with the U.S. Securities and Exchange Commission, a Hong Kong-based asset manager is the largest holder of BlackRock’s IBIT fund.
While flows into spot crypto ETFs have slowed, institutional interest in the tokenization of real-world assets (RWA) is gaining momentum. Last week, BlackRock’s BUIDL fund surpassed the $300 million mark, surpassing Franklin Templeton’s BENJI to become the largest tokenized US Treasury bond fund.
This growth was driven by Ondo Finance, which transferred US$95 million to the BlackRock fund.