The spot Bitcoin ETFs' saw $4.93 billion in net inflow but where are the “new” investors?
A record $2.45 billion inflow in digital asset products in the week ending Feb. 17, and Bitcoin’s (BTC) price appreciation, caused the industry’s assets under management to reclaim December 2021 levels at $67.1 billion. Most of the investment happened in the United States through Bitcoin’s spot exchange-traded funds (ETFs), according to a Feb. 19 CoinShares blog post. However, some data points to the Bitcoin ETF inflow not being driven by new entrants, which is far less bullish than previously thought.
Given the ETF launch's success, one must consider whether the 21.8% price gains by Feb. 19 meet investors' expectations. Despite this achievement, Bitcoin's price is still nearly 25% below the $69,000 all-time high, and previous instances of entities announcing billion-dollar acquisitions in Bitcoin caused a much stronger price reaction. Consequently, one would have expected a much higher impact from the ETFs' $4.93 billion net inflow since their launch on Jan. 11, as displayed by BitMEX Research data.
There are a couple of possible explanations for Bitcoin’s limited performance, although it is impossible to determine how each market participant values their position or what the rationale behind the sell pressure is. But one thing is certain: if nearly $5 billion of net inflows entered the spot Bitcoin ETFs, then the same size was sold by previous holders. Some analysts and investors confuse daily issuance with available supply for trade, but those are not necessarily aligned.
