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U.S. Spot Bitcoin ETFs See Strong Inflows Amid Easing Trade Tensions
Investor interest in spot Bitcoin ETFs continues to rise, marking the third consecutive week of substantial inflows. This growth has been attributed to improving geopolitical conditions, including easing trade war worries following recent developments between the U.S. and key global partners.
Spot Bitcoin ETFs Attract $921 Million in Weekly Inflows
Data from recent market reports reveal that 12 spot Bitcoin ETFs collectively brought in $921 million during the week of May 5-9. Over the last three weeks, these investment products have accumulated nearly $5.8 billion in inflows, showcasing consistent demand from investors.
The standout performer was BlackRock’s IBIT, which attracted over $1 billion in inflows last week alone. This marks its 19-day streak of consecutive inflows, adding more than $5 billion to its assets. This streak is now the longest-running inflow trend for any spot Bitcoin ETF in 2023.
Other notable contributors include Fidelity’s FBTC and ARK 21Shares’ ARKB, which saw inflows of $62.4 million and $45.6 million, respectively. However, not all funds experienced gains. Grayscale’s GBTC, Bitwise’s BITB, Franklin Templeton’s EZBC, and VanEck’s HODL recorded a combined outflow of $217.4 million, slightly offsetting the week’s overall gains. The remaining Bitcoin ETFs reported no changes in their fund flows.
Total Net Inflows Reach Record High
Following last week’s inflows, cumulative net inflows into spot Bitcoin ETFs since their inception have reached $41.16 billion—a new all-time high for these investment vehicles. Analysts attribute this surge to favorable macroeconomic developments and renewed investor confidence in cryptocurrency markets.
Geopolitical Developments Boost Market Sentiment
Recent geopolitical events have played a significant role in boosting investor sentiment. The U.S. announced a trade agreement with the U.K., which includes the reduction of tariffs on British cars, aluminum, and steel. In return, the U.K. will expand market access for American exports such as beef and ethanol. Meanwhile, talks between the U.S. and China have resumed, easing global market uncertainties.
As trade tensions diminished, Bitcoin prices surged past the $100,000 mark, trading around $104,000 at the time of writing. This puts Bitcoin just 4.5% below its all-time high achieved in January. Additionally, the Crypto Fear & Greed Index climbed to 70, firmly in “greed” territory, indicating a return to risk-on sentiment among investors.
ETF Flows Fuel Bitcoin’s Rally
Analysts credit the recent Bitcoin rally to strong capital inflows into spot Bitcoin ETFs, alongside increasing institutional and government participation. According to market experts, these inflows have provided a stable foundation for Bitcoin’s upward momentum, reinforcing its position as a preferred investment asset.
Ethereum ETFs Struggle Amid Bitcoin’s Success
While Bitcoin ETFs enjoyed significant inflows, their Ethereum counterparts had a challenging week. Nine spot Ethereum ETFs recorded a combined net outflow of $38.15 million, with three days of outflows outweighing just one day of inflows. This divergence highlights the contrasting investor sentiment between Bitcoin and Ethereum during the same period.
As spot Bitcoin ETFs continue to perform strongly, the cryptocurrency market is showing resilience amid shifting global economic and political landscapes. Investors are keeping a close eye on these developments, with Bitcoin positioned as a key asset in navigating the evolving financial ecosystem.
