US Bitcoin ETF Sees Approximately $900 Million Net Inflow Over First 3 Trading Days

1st Place BlackRock Inflows $723 Million
Grayscale Outflows $1.18 Billion
"Disappointing Launch" vs "Long-term Expectations"

In the United States, nearly $900 million (approximately 1.2 trillion KRW) has flowed in net within just three trading days since the launch of Bitcoin ETFs.

On the 17th (local time), major foreign media outlets reported, citing data from digital asset management firm CoinShares, that the net inflow during this period reached $871 million (approximately 1.1715 trillion KRW).

Earlier, the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETFs, including Grayscale, Bitwise, and BlackRock, on the 10th (local time).

Among them, the world's largest asset manager, BlackRock, attracted the largest amount of funds, with $723 million (approximately 972.4 billion KRW) flowing in. Fidelity followed with an inflow of $545 million (approximately 733 billion KRW).

However, an outflow of $1.18 billion (approximately 1.5871 trillion KRW) from Grayscale, which exceeded BlackRock's inflow, offset the inflows. Upon the approval of the Bitcoin ETF, Grayscale converted its existing $28 billion (approximately 37.66 trillion KRW) Bitcoin fund into an ETF.

Analysts believe that most of the funds withdrawn from Grayscale likely moved to new providers charging lower fees than Grayscale. Excluding Grayscale, about $2 billion (approximately 2.69 trillion KRW) flowed into the remaining 10 ETFs.

Regarding investors withdrawing assets from Grayscale, James Butterfill, Head of Research at CoinShares, said, "Grayscale had been traded as a closed-end fund for a long time, so it is not surprising that selling pressure occurred immediately after the ETF was approved." He also suggested that Grayscale’s higher fee level of about 1.5%, which is more than 1% higher than other providers, played a role.

Nevertheless, even excluding this, the industry evaluates that the Bitcoin ETF launch fell short of expectations. Ilan Solot, Co-Head of Digital Assets at Marex Solutions, stated, "This launch was by no means a big success," adding, "Bitcoin’s recent price shows that the launch was disappointing compared to what the ETF had anticipated." Bitcoin had surged more than 70% since October last year amid rising expectations for ETF approval but has declined since the approval.

Compared to the launch of the ProShares Bitcoin futures ETF in October 2021, the performance is also considered disappointing. At that time, ProShares saw about $1 billion (approximately 1.345 trillion KRW) in inflows over two days.

Some major asset managers have no plans to launch Bitcoin ETFs. Vanguard, the world’s second-largest asset manager, said, "Bitcoin ETFs do not align with providing a balanced long-term investment portfolio."

Some argue that it is still too early to judge success or failure. Analysts believe it will take considerable time for advisors to become familiar enough with the new product to recommend adding Bitcoin ETFs to client portfolios. An executive at an ETF issuer, who requested anonymity, said, "Bitcoin ETFs are new news to many clients," adding, "It will take significant time for clients to receive sufficient education, understand the role in their portfolios, and decide to invest." He continued, "We are optimistic about the long-term outlook. We are providing an opportunity to access a completely new market."