The primary driver behind this price appreciation can be attributed to the increased inflow into BTC Spot ETFs. As anticipated in previous weeks, the outflow from the Grayscale Bitcoin ETF (GBTC) was expected to diminish after the initial couple of weeks of trading. This expectation materialized, with GBTC outflows showing a significant decrease in the final days of January and continuing to decline through February.
The daily outflow from GBTC during the two initial weeks post-approval averaged around $500 million. However, in the past week, total outflows from GBTC amounted to approximately $415 million, translating to a daily average of about $83 million. This represents nearly an 85% reduction in outflows compared to the first two weeks of trading.
The noticeable correlation between the diminishing outflows from GBTC and the upward trend in prices is also evident when examining the total daily flows into BTC Spot ETFs. The substantial reduction in GBTC outflows began on January 26th, coinciding with the beginning of a consistent influx into BTC Spot ETFs, resulting in 11 consecutive days of net inflows, commenced exactly on the 26th of January.
Furthermore, there is a strong correlation between the magnitude of the inflows and the reduction in GBTC outflows. While GBTC recorded a cumulative outflow of $415 million last week, representing a significant reduction from previous weeks, BTC Spot ETFs saw a total net inflow of about $1.2 billion during the same period, marking the highest weekly inflow since their launch.
Among the newly launched BTC ETFs, Blackrock (IBIT) maintains its lead with about $4.2 billion in assets under management (AUM), followed by Fidelity ETF (FBTC) with approximately $3.5 billion in AUM. Notably, a third ETF surpassed $1 billion in AUM last week, as the BTC ETF offered by Ark & 21Shares (ARKB) now boasts $1.02 billion in AUM. Additionally, it is noteworthy that the past week witnessed the first daily outflow from a BTC ETF other than GBTC. Specifically, Galaxy & Invesco ETF (BTCO) experienced approximately $17.5 million in outflows on Friday.
Trading volumes remain exceptionally high, with a cumulative volume of about $5.5 billion recorded in the past week, equating to a daily trading volume of approximately $1.1 billion. Since their inception, cumulative trading volumes have reached $35.6 billion, with an average daily trading volume of around $1.7 billion.
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