Bitcoin ETFs Return to Inflows, Driven by BlackRock

A Finally Positive Week

US funds exposed to bitcoin ended the week of October 19 to 23 with $304.73 million in net inflows, according to the balance published by Bitcoin.com News. The result reverses the negative balance of the previous week. The return of subscriptions, however, does not describe a regular progression: the first sessions attracted capital, before two days of significant withdrawals. The weekly balance thus gathers movements in opposite directions, rather than a continuous demand throughout the period.

A net entry measures the difference between inflows and outflows within the observed perimeter. It corresponds neither to the total volume of exchange on the Stock Exchange nor to the variation in the price of bitcoin. Investors can exchange existing shares among themselves without causing an equivalent subscription in the fund. Conversely, creations or repurchases of shares modify the amounts invested. This distinction allows us to understand why a week of positive flows can coexist with a hesitant market.

BlackRock Concentrates Inflows

IBIT, BlackRock's product, received $675.96 million in net inflows over the week. This amount exceeds the balance of all bitcoin ETFs, because withdrawals at other issuers compensated part of its inflows. Fidelity, Ark and 21Shares as well as Grayscale are among the managers who recorded outflows. The aggregated figure therefore does not mean that all funds gained capital. It translates the addition of the trajectories of each product, positive and negative.

The concentration of subscriptions brings different information than their total amount. A collection distributed among several funds testifies to a more diffuse movement in this investment channel; a collection dominated by a single product can also reflect arbitrages between issuers. The flow data alone do not allow identifying each subscriber, their motivations or their investment horizon. They are therefore insufficient to attribute all inflows to institutional investors nor to conclude that savers anticipate all a rise.

Divergent Trajectories According to Asset

The table remains contrasted for other cryptoassets. Funds exposed to ether lost $220.60 million in net inflows during this same week, their fourth consecutive weekly negative balance. Those linked to Zcash, on the contrary, recovered inflows. The return of capital on bitcoin is therefore not transmitted uniformly to other categories. Each set of funds has its own net asset value, its liquidity and its base of investors, which limits the scope of a comparison based solely on gross amounts.

These figures describe a past week and a precise market: that of the funds followed in the US balance. They do not list all direct acquisitions of cryptocurrencies, transactions carried out elsewhere or positions in derivative products. To appreciate the future, the evolution of subscriptions will have to be compared to the following sessions and their distribution among issuers. A positive balance constitutes a collection observation; it establishes neither a floor under the price nor a durable recovery of demand.