Bitcoin exchange-traded funds (ETFs) experiencing days with zero inflows is a common occurrence and should not be misunderstood as a failure of the products themselves, according to James Seyffart, an ETF analyst at Bloomberg. Seyffart explained that it is normal for most ETFs in a given sector to have zero inflows on most days. Concerns were raised by market commentators about the low inflows into US-based Bitcoin ETFs, with BlackRock’s Bitcoin ETF being the only one to see inflows for two consecutive trading days. However, Seyffart stated that these flows are not a cause for concern and are typical for most ETFs due to the way new inflows are recorded. He further explained that for an ETF to record new inflows or outflows, there needs to be a significant mismatch between supply and demand. Creation units, which are used to create and redeem ETF shares, can vary in size for each ETF. Recent trading days have seen all ten US spot Bitcoin products witness net outflows, with the Grayscale Bitcoin Trust experiencing the largest outflows. These outflows coincide with a period of subpar price action for Bitcoin, which has been attributed to escalating geopolitical tensions in the Middle East and the upcoming Bitcoin halving event.
The Misconception Behind Bitcoin ETFs with 'Zero Flows'
Add A Comment