Spot Bitcoin ETFs Attract $438M in 2 Days as Investors Buy the Dip

The recent decline in Bitcoin prices has prompted investors towards huge buying of spot Bitcoin ETFs. According to a report from Bloomberg, the US spot Bitcoin Exchange traded funds (ETFs) have seen a total of $438M net inflow in only 2 trading sessions.

The rising investment activity was attributed to the major bitcoin price drop of around 20% since early june.

Unlike traditional method of selling at declining prices, the buying activity has increased during the dip.

According to Charlie Morris, Chief Investment Officer at ByteTree, the recent supply storm would soon pass because most investors still do not own the Bitcoin which suggests a long term bullish outlook. Morris was emphasizing on the temporary nature of current market fall.

There could be many reasons behind the recent selling pressure on bitcoin. However, the most significant and impactful reason could be the repayments related to the defunct Mt. Gox exchange along with a German government entity liquidating BTCs.

Recent drop in Bitcoin prices stem from the Mt. Gox bankruptcy which happened a decade ago, but the firm is now returning about $8 Billion of Bitcoin to creditors which is causing concern for prices.

Bloomberg's Olga Kharif as the story https://t.co/KzjSQBd3FL pic.twitter.com/SgbkYVhwHD

— Bloomberg Crypto (@crypto) July 9, 2024

However, many analysts are suggesting that these factors are contributing to major buying as it is providing an attractive entry point for new investors at discounted rates.

According to a report from an investment firm, CoinShares, digital asset investment products saw an inflow of $441 million over the past week.

📈 #Bitcoin saw inflows of US$397m but, unusually, only accounted for 90% of digital asset investment of inflows (US$441m) as investors chose to invest in a much broader range of altcoins.

Get more insights in our full report: https://t.co/ZbgPDr9VKM pic.twitter.com/Asp4JtJMWA

— CoinShares (@CoinSharesCo) July 8, 2024

Despite these significant inflows, trading volumes in exchange-traded products remained relatively low at $7.9 billion. However, this is consistent with typical summer patterns. Historically, July has been a bullish month for the crypto market, with a median return of 9%.

Therefore, many traders expect this trend to continue and are buying the digital asset investment products.

Meanwhile, data from SoSoValue reveals that the cumulative net inflow for Bitcoin has reached $15.27 billion, with a daily net inflow of $216 million. The total net assets across Bitcoin ETFs currently stand at $50.79 billion, with Bitcoin priced at $58,904.6 at the time of reporting.

These figures highlight the sustained institutional interest in Bitcoin through regulated ETF products. This is notable despite the recent price volatility and selling pressure. Notably, BlackRock’s IBIT led the inflows with about $121 million. Fidelity’s FBTC followed with $90.95 million.

This significant influx of capital into Bitcoin ETFs demonstrates the confidence of investors in the long-term value of Bitcoin. The willingness to buy during price dips could potentially provide support for Bitcoin’s value.

This could help stabilize the market amidst ongoing challenges. As the market adapts to the current pressures, the robust inflows suggest a resilient optimism among institutional investors about the future of Bitcoin.