BIT TREASURE: Exploring the Potential Impact of Bitcoin Spot ETFs on Cryptocurrency Prices

Since the listing of Bitcoin spot exchange traded funds (ETFs) in the United States, the relevant information of Bitcoin spot ETFs has undoubtedly become an important factor affecting Bitcoin prices and the direction of the cryptocurrency market. So, how much impact does Bitcoin spot ETF have on future Bitcoin prices? Will it lead to the arrival of a cryptocurrency bull market? This article will analyze the relevant data of ETFs.

For the price changes of Bitcoin, the inflow of funds related to Bitcoin spot ETF products is our primary consideration. In this regard, we have summarized the following data.

Flow of Bitcoin Spot ETF Funds and Bitcoin Price Situation

On January 11th, BitMEX Research data showed that the total net inflow of funds for seven Bitcoin spot ETF products reached $400 million, of which Fuda's FBTC had a net inflow of $227 million, BlackRock's IBIT had a net inflow of $112 million, and Franklin's EZBC had a net inflow of $50.1 million.

Meanwhile, according to the Binance market, on January 11th, the opening price of Bitcoin was $48969, setting a new high for Bitcoin prices since 2022.

On January 17th, BitMEX Research data showed that after four trading days, Bitcoin spot ETF funds accumulated a net inflow of 932 million US dollars, of which BlackRock's IBIT accumulated a net inflow of 1.085 billion US dollars, Fidelity's FBTC accumulated a net inflow of 884 million US dollars, and Bitwise's BITB accumulated a net inflow of 375 million US dollars. The grayscale GBTC flowed out $458 million on the fourth day, with a total outflow of $1.6 billion at this time.

According to the Binance market, on January 17th, the opening price of Bitcoin was $41410, and since the passage of Bitcoin spot ETFs on January 11th, the price of Bitcoin has continued to decline.

On January 18th, BitMEX Research data showed that after 5 trading days, the cumulative net inflow of Bitcoin spot ETF funds exceeded 1.16 billion US dollars. Among them, BlackRock's IBIT net inflow was 1.231 billion US dollars, Bitwise's BITB net inflow was 396 million US dollars, and Grayscale's GBTC net outflow was 2.2 billion US dollars.

According to the Binance market, on January 18th, the opening price of Bitcoin was $41300, and since the Bitcoin spot ETF was approved on January 11th, the price of Bitcoin has continued to decline.

On January 22nd, BitMEX Research data showed that Bitcoin spot ETFs had a cumulative net inflow of $1.089 billion over 7 trading days, of which BlackRock's IBIT had a cumulative net inflow of $1.689 billion, Bitwise's BITB had a cumulative net inflow of $492 million, Grayscale's GBTC had a cumulative net outflow of $3.447 billion, and a daily net outflow of $87.5 million.

According to the Binance market, on January 22nd, the closing price of Bitcoin was $39620, with a daily decline of 4.84%.

On January 23rd, BitMEX Research data showed that due to the decline in Bitcoin prices, the cumulative total inflow of Bitcoin spot ETFs was 982.9 million US dollars. Since the listing of Bitcoin spot ETFs, major institutions have accumulated a net inflow of 21362.5 Bitcoins, and the grayscale GBTC has accumulated an outflow of 95296.2 Bitcoins. On the 8th trading day, Grayscale's GBTC had a net outflow of approximately $515.3 million, BlackRock's IBIT had a net inflow of $160.1 million, Fidelity's FBTC had a net inflow of $157.7 million, Bitwise's BITB had a net inflow of $26.3 million, and Ark 21Shares had a net inflow of $61.8 million.

According to the Binance market, on January 23rd, the lowest daily price of Bitcoin plummeted to $38555.

On January 25th, BitMEX Research data showed that Bitcoin spot ETFs had a net outflow of $80 million on the 10th trading day, of which the grayscale GBTC had a net outflow of approximately $394.1 million, BlackRock's IBIT had a net inflow of $170.7 million, Fidelity's FBTC had a net inflow of $101 million, Bitwise's BITB had a net inflow of $20 million, and Ark 21Shares had a net inflow of $16.1 million.

According to the Binance market, on January 25th, the price of Bitcoin rebounded from a low of 38555 to around $40000.

On January 26th, BitMEX Research data showed that Bitcoin spot ETFs had a daily inflow of $14.8 million, with a grayscale GBTC outflow of $255.1 million on the 11th trading day, with a cumulative outflow of over $5 billion. Fidelity's FBTC had a net inflow of $100 million, and BlackRock's IBIT had a net inflow of $87 million.

According to the Binance market, on January 26th, the closing price of Bitcoin reached $41840, with a daily increase of 4.66%.

On January 29th, BitMEX Research data showed that Bitcoin spot ETFs had accumulated inflows of $1.015 billion, of which Fidelity's FBTC had a net inflow of $208 million, BlackRock's IBIT had a net inflow of $198 million, and Grayscale's GBTC had an outflow of $192 million.

According to the Binance market, on January 29th, the closing price of Bitcoin reached $43310, with a daily increase of 3.46%.

On January 30th, BitMEX Research data showed that Bitcoin spot ETFs had accumulated inflows of $1.261 billion, of which Fidelity's FBTC had a net inflow of $299 million, BlackRock's IBIT had a net inflow of $119 million, and Grayscale's GBTC had an outflow of $221 million.

According to the Binance market, on January 30th, the closing price of Bitcoin was $42970.

On February 1st, BitMEX Research data showed that Bitcoin spot ETFs had accumulated inflows of $1.379 billion, of which Fidelity's FBTC had a net inflow of $3500, BlackRock's IBIT had a net inflow of $163 million, and Grayscale's GBTC had an outflow of $182 million.

According to the Binance market, on February 1st, Bitcoin closed at $43100.

According to data released by BitMEX Research, since February 1st, the cumulative inflow of funds into various institutions of Bitcoin spot ETFs has shown a slow growth, while the price of Bitcoin has also steadily increased.

On February 9th, the Binance market showed that the price of Bitcoin reached a high of $48200, with a daily increase of 4.09%. The data of Bitcoin spot ETF on that day is as follows:

According to BitMEX Research data, on February 9th, the cumulative inflow of Bitcoin spot ETFs was $2.653 billion, with a single day net inflow of $5415 million. Among them, BlackRock's IBIT net inflow was $250 million, Fidelity's FBTC net inflow was $188 million, Bitwise's BITB net inflow was $29.1 million, and Ark 21Shares' ARKB net inflow was $136 million.

On February 12th, BitMEX Research data showed that Bitcoin spot ETFs had a cumulative inflow of $3.146 billion, with a single day net inflow of $493.3 million. Among them, BlackRock's IBIT fund had a net inflow of $374 million, Fidelity's FBTC fund had a net inflow of $159 million, Bitwise's BITB fund had a net inflow of $33 million, and Ark 21Shares' ARKB fund had a net inflow of $40 million.

According to the Binance market, on February 12th, the closing price of Bitcoin was $49900, with a daily increase of 4.35%.

On February 13th, BitMEX Research data showed that Bitcoin spot ETFs had a cumulative inflow of $3.778 billion, with a single day net inflow of $631 million. Among them, BlackRock's IBIT fund had a net inflow of $493 million, Fidelity's FBTC fund had a net inflow of $163 million, Bitwise's BITB fund had a net inflow of $10.8 million, and Ark 21Shares' ARKB fund had a net inflow of $35 million.

According to the Binance market, on February 13th, the closing price of Bitcoin was $49670, with little change compared to the previous day's price.

On February 14th, BitMEX Research data showed that Bitcoin spot ETFs had a cumulative inflow of $4.117 billion, with a single day net inflow of $340 million. Among them, BlackRock's IBIT fund had a net inflow of $224 million, Fidelity's FBTC fund had a net inflow of $118 million, Bitwise's BITB fund had a net inflow of $47.2 million, Ark 21Shares' ARKB fund had a net inflow of $102 million, and Grayscale's GBTC fund had an outflow of $131 million.

According to the Binance market, on February 14th, the closing price of Bitcoin was $51790, a daily increase of 4.22%, reaching a new high since 2022.

On February 15th, BitMEX Research data showed that Bitcoin spot ETFs had a cumulative inflow of $4.595 billion, with a single day net inflow of $477 million. Among them, BlackRock's IBIT fund had a net inflow of $330 million, Fidelity's FBTC fund had a net inflow of $97.4 million, Bitwise's BITB fund had a net inflow of $12000, Ark 21Shares' ARKB fund had a net inflow of $88.9 million, and Grayscale's GBTC fund had an outflow of $174 million.

According to the Binance market, on February 15th, the price of Bitcoin briefly reached a high of $52816, continuing to reach a new high since 2022.

The Impact of Bitcoin Spot ETF Products on Bitcoin Prices

Through data analysis, we can identify the following characteristics:

1. The capital inflows of Bitcoin spot ETF products are mainly concentrated in the top few institutions. BlackRock, Fidelity, Bitwise, Ark 21Shares, and others account for the majority of the capital flow, showing a concentration of funds at the top.

2. The funds of grayscale Bitcoin spot ETF products are continuously flowing out and becoming the main outflow institution. Just 7 trading days after the listing of Bitcoin spot ETFs, the outflow of grayscale funds exceeded $2 billion. As of February 15th, the outflow of GBTC funds from grayscale has exceeded $6.7 billion.

3. The inflow of funds from top asset management institutions peaked in late January and early February. BlackRock, Fidelity, Bitwise and other institutions continuously increased their holdings of Bitcoin from January 16th to January 30th, and they also showed significant increases in their holdings after February 8th.

4. The price of Bitcoin reached its lowest level since the listing of ETFs on January 23, and has since continued to rise. After Bitcoin's spot ETF was approved for listing, its price continued to decline until it dropped to around $39000 on the 23rd, and then continued to rise above $50000.

Based on the various characteristics mentioned above, we can further analyze the relationship between Bitcoin price trends and Bitcoin spot ETFs, and summarize the following points:

1. The long short game causes the price of Bitcoin to rise and fall. According to the institutional cash flow and Bitcoin price data mentioned earlier, after Bitcoin spot ETFs were approved for listing, their prices briefly rose and then continued to decline until reaching around 39000 on the 23rd. However, during this period, leading institutions such as BlackRock and Fidelity continued to significantly increase their holdings of Bitcoin, and the factor that led to the price decline may be the continuous selling of Bitcoin by Grayscale. During this period, it can be observed that the change of hands in the long short game resulted in the cumulative inflow of Bitcoin spot ETFs remaining around $1 billion. After February, as various institutions continued to increase their positions, the inflow of funds into institutions such as BlackRock, Fidelity, Bitwise, and Ark 21Shares was significantly greater than the outflow of funds from grayscale, with multiple parties exceeding bears, resulting in a significant increase in prices.

2. Grayscale may no longer be a C-player in Bitcoin spot ETFs. Firstly, compared to institutions such as BlackRock, Fidelity, Bitwise, Ark 21Shares, etc., which have a funding rate of around 0.3%, the GBTC funding rate for Grayscale is around 1.5%, which is not synchronized with other products in the market and is clearly not conducive to the development of its asset management products. Secondly, the outflow of funds from Grayscale exceeded 6.7 billion US dollars. According to the official position information released by Grayscale, as of February 16, 2024, GBTC held a total of 456000 Bitcoins, while in 2021, Grayscale's GBTC held over 600000 Bitcoins. The price fluctuations of Bitcoin in the future may be influenced by multiple large asset management institutions.

3. From the perspective of ETFs, the price of Bitcoin is susceptible to the actions of large institutions. From the perspective of Bitcoin spot ETFs alone, if institutions such as BlackRock, Fidelity, Bitwise, Ark 21Shares continue to increase their holdings of Bitcoin in the future, and grayscale stops or reduces selling or adopts additional positions, then the possibility of Bitcoin continuing to rise is relatively high. If these institutions stop adding or even reducing their positions, small and medium-sized institutions in the cryptocurrency market will find it difficult to bear pressure and prices will fall.

The price trend of Bitcoin

The approval of the US Bitcoin spot ETF has enabled Bitcoin to legally integrate into the global financial system, becoming an investment product on par with assets such as gold and crude oil. This milestone achievement marks an important breakthrough in the field of digital currency.

The influencing factors of Bitcoin price fluctuations, in addition to the size of spot ETF funds, also involve the Federal Reserve's interest rate policy and Bitcoin halving at the macro level. According to CME data, the market predicts that the first rate cut by the Federal Reserve may occur in June, with a probability of 53.7%. Meanwhile, according to information from Binance, the next Bitcoin halving is expected to occur around April 15, 2024. With the occurrence of the Bitcoin halving event and the continuous decline of the Federal Reserve's benchmark interest rate, the price of Bitcoin may usher in a new round of bull market.