Bitwise CEO Hunter Horsley has forecasted a significant uptick in holdings of Bitcoin exchange-traded funds (ETFs) by wealth management firms. This projection comes amidst an observable surge in demand for ETFs in the U.S. Bitcoin market, especially following recent positive inflows.
ETF Market Dynamics
The prediction by Horsley is well-timed, considering the Bitcoin ETF landscape is heating up post-halving, with market sentiment leaning heavily towards increased adoption. This trend is supported by recent data showing net positive inflows into Bitcoin ETFs in the U.S., marking a reversal after five days of consecutive outflows. Notably, BlackRock’s iShares Bitcoin Trust (IBIT) is quickly closing in on Grayscale’s Bitcoin Trust (GBTC), with only a $2 billion gap separating the two. This positions BlackRock on a potential path to surpass Grayscale as the world’s largest Bitcoin fund.
Shifting Dominance in Bitcoin Funds
Grayscale’s GBTC has been experiencing a protracted decline, losing nearly $16 billion over 68 days, which brought its total assets down to $19.4 billion. In stark contrast, IBIT has shown resilience with steady asset growth, reaching about $17.3 billion. However, Grayscale has faced significant challenges, with notable capital outflows from its spot Bitcoin ETF, including $89.9 million withdrawn in just the last five days.
Market Response and Strategic Investments
Amidst shifting dynamics, major players like Fidelity and BlackRock have quickly capitalized on the market’s movements, securing substantial inflows into their Bitcoin ETFs. These inflows are providing much-needed liquidity to the market. Meanwhile, in a strategic move, the bankrupt crypto lending firm Genesis offloaded approximately 36 million GBTC shares to acquire 32,041 Bitcoin.
