Exchange-traded fund (ETF) specialist Eric Balchunas highlights changing trends in the U.S.-listed Bitcoin (BTC)-based fund market. He said optimism has returned after a period of stagnation.
“Bitcoin ETF flows are back on track again,” he said on the X account, given the sector’s recovery.
Balchunas explained: The selling pressure that affected the market a few months ago has dissipated.. “All the volatility we’re tracking right now is positive, which we haven’t seen in months,” he said, detailing the constant inflow of capital.
The main driver of this phenomenon is the iShares Bitcoin Trust (IBIT) fund managed by BlackRock. This fund has registered: Net capital inflows so far this year are $3.082 billion
Balchunas emphasizes the relevance of this number by stating that “3 billion IBITs are in the top 1% of all ETFs” in the global market (not just Bitcoin).
This means IBIT is essentially single-handedly “rowing” to keep Bitcoin ETF flows positive this year, and it’s doing so with enough force to compete with the giant S&P 500 and gold funds.
The size of IBIT’s funding has been described by analysts as “historically large.” Last 12 months This product raised over $25.186 billion. In fact, IBIT is cannibalizing the current market because its capital absorption capacity alone can offset the outflows suffered by other competing funds.
Balchunas said that the total historical value of Bitcoin ETFs has reached $60.397 billion. “Still, we still need another $2 billion to break new ground with $62.8 billion in cumulative flows,” he said.
This need for additional capital means the pace of IBIT-led purchases must be maintained. The performance of these funds is very important to the price of Bitcoin, as managers must buy Bitcoin and hold it in the treasury to back their stocks. This mechanism ensures that each issued share has a physical counterpart in digital currency. As CriptoNoticias explained, the impact of these purchases is reflected directly in the price of the asset due to the law of supply and demand.
exactly, Bitcoin rose 9.6% last monthrose from $64,948 at the end of March to $79,463 reached yesterday, April 22nd.
The sustainability of this valuation now depends on whether the market can outperform the cumulative flow record mentioned by Balciunas. If the demand for Bitcoin ETF continues, companies will continue to push up prices Through open market purchases.
