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The Stream Has Dried Out: BlackRock’s Bitcoin ETF Experiences First Day of Zero Inflows

Stopping streak: BlackRock’s IBIT sees first zero inflow day

BlackRock’s iShares Bitcoin Trust (IBIT) has experienced its first day with no new inflows since its introduction, marking a significant moment in the history of Bitcoin ETFs in the U.S.

Key takeaways:

  • BlackRock's IBIT recorded $0 inflows for the first time on April 24, ending a consistent inflow streak.
  • Other U.S. Bitcoin ETFs also experienced reduced inflows, with notable outflows from the Grayscale Bitcoin Trust.
  • The ETF market continues to face regulatory scrutiny, particularly for proposed Ether ETFs.

For the first time since its launch on January 11, BlackRock’s iShares Bitcoin Trust (IBIT) registered zero inflows on April 24, breaking a nearly uninterrupted daily inflow streak. Since its inception, IBIT has quickly amassed approximately $15.5 billion over 71 days, illustrating robust investor interest. This sudden halt aligns with a broader trend observed on the same day across other Bitcoin ETFs in the United States, where only two out of 11 registered positive inflows. 

Specifically, Fidelity Wise Origin Bitcoin Fund and ARK 21Shares Bitcoin ETF managed to attract $5.6 million and $4.2 million, respectively. Conversely, the Grayscale Bitcoin Trust reported significant outflows, losing $130.4 million on April 24, contributing to a net outflow of $120.6 million from spot Bitcoin ETFs. This shift indicates a cooling period for Bitcoin ETFs, which have been a barometer for institutional interest in cryptocurrencies.

Market dynamics: challenges in the ETF sector and regulatory delays

The broader ETF market, particularly for cryptocurrencies, faces ongoing challenges including regulatory hurdles. Several firms are actively pursuing the launch of Ether ETFs in the U.S., but the Securities and Exchange Commission (SEC) has recently postponed approval decisions. On April 23, the SEC extended the review period for these ETFs, citing the need for additional time to consider the proposed rule changes. 

This delay affects several pending applications, including a significant decision regarding the conversion of Grayscale’s ETH Trust into a spot ETH exchange-traded product on the NYSE Arca, now postponed until June 23. The SEC's cautious stance underscores the regulatory uncertainties still clouding the cryptocurrency market, impacting investor sentiments and the pacing of new product introductions.