After a depressing few weeks the drains could turn the tide Bitcoin Exchange Traded Funds (ETFs): On Friday, each of the relatively new investment products recorded a positive cash flow for the first time.
Data from Farside Investors shows that the unanimous turnaround was due to investors investing more money Grayscale’s Bitcoin Trust (GBTC) than has been pulled out of it since it became an ETF in January.
The fund had experienced drains Day after day, as investors who previously couldn't redeem shares did so, often in search of competitive funds with lower fees.
But on Friday, GBTC growth by $63 million. Combined with the fact that investors were pouring cash into all other crypto funds, this meant a total of $378 million entered the collective Bitcoin ETF market that day.
This marks a notable turnaround as investment vehicles had their worst day on record early last week bled over half a billion dollars. And that came after investor interest in the products had been waning for weeks.
The Securities and Exchange Commission in January approved 11 spot Bitcoin ETFs after a decade of applications. The funds allow ordinary investors to purchase stocks through brokerage accounts that track the price of the cryptocurrency.
They were immediately and enormously popular, with billions of dollars flowing into the funds. The explosion in popularity of ETFs is blamed for this drive up the price According to CoinGecko, Bitcoin reached a new all-time high of $73,747 in March.
But the initial hype died down last month. Additionally, the Federal Reserve indicated it was in no rush to cut interest rates, and turmoil in the Middle East scared investors away from so-called “risk assets” like Bitcoin.
Investors withdrawing money from the funds put downward pressure on the funds Price of Bitcoinwhich is now not only below its all-time high from March, but also below the 2021 record of $69,044.
Friday brought welcome relief. Could a continued optimistic shift in investor sentiment push the coin's price higher again?
Edited by Ryan Ozawa.
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