Bitcoin spot Exchange-Traded Funds (ETFs) experienced a substantial increase on March 12, with a record-setting total net inflow of $1.05 billion. This marked the highest single-day net inflow since the initiation of the ETF, demonstrating a significant growth of approximately 56% from the previous record on Feb. 28. One of the key reasons behind this surge in Bitcoin ETF inflows could be attributed to their consistent performance, which has outpaced the newly mined supply of Bitcoin.

Data from SoSoValue reveals that on March 12, the total net inflow into Bitcoin spot ETFs reached $1.05 billion, setting a new record for the highest single-day net inflow since the ETF’s inception, representing a substantial increase of approximately 56% compared to previous figures.

Clive Thompson, a former managing director of wealth management with a background in Swiss Private Banking, highlighted on LinkedIn that on March 11, new Bitcoin ETFs acquired roughly 7200 Bitcoins, significantly surpassing the average daily mined supply of 900 Bitcoins. This supply-demand imbalance led to a 5% increase in Bitcoin prices.

Thompson also pointed out the market dynamics influenced by Genesis Holdings, which began liquidating its GBTC shares following bankruptcy. These sales, initiated on Feb. 28, concluded around March 13, potentially impacting Bitcoin’s price trajectory. There are expectations for a surge to new highs, leading to more inflows into Bitcoin ETFs.

Eric Balchunas, a senior ETF analyst, noted the remarkable trading volumes within the Bitcoin ETF market on March 12. The market experienced its second-highest trading volume day for ten spot Bitcoin ETFs, with a total volume of $8.5 billion, surpassing that of all but five stocks. Notably, BlackRock’s IBIT spot Bitcoin ETF saw significant activity, doubling the trading volume of SPDR Gold Shares ETF (GLD). Other ETFs like VanEck’s HODL and Invesco Galaxy’s BTCO also witnessed substantial trading volumes, showcasing their success in the market.

The success of IBIT has generated increased interest in Bitcoin ETFs, with BlackRock exploring regulatory approval to expand its cryptocurrency offerings. This includes proposals for additional spot Bitcoin ETFs and inclusion in its Global Allocation Fund, as well as efforts to reach emerging markets in Latin America through the launch of the iShares Bitcoin Trust ETF’s Depositary Receipts in Brazil.

However, the journey for new cryptocurrency ETFs, including Ethereum (ETH), faces regulatory challenges. The SEC’s delay in approving or denying these filings until May has raised speculation among experts. The lack of communication between the SEC and ETF issuers like BlackRock contributes to uncertainty in the market. Despite this, there is anticipation for upcoming discussions that could potentially influence the SEC’s stance on these innovative financial products.

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