$556M in spot Bitcoin ETF inflows indicates a significant shift in investor sentiment

Institutional investors continue to fuel adoption and the ongoing price surge of Bitcoin, resulting in record daily inflows into Bitcoin ETFs.

In the United States, Spot Bitcoin exchange-traded funds (ETFs) experienced their most substantial single-day inflows in more than 120 days on October 14.

Bitcoin’s BTC price reached its greatest level in over three months, surpassing $67,800, in response to the inflow of over $500 million into the funds.

Nate Geraci, president of ETF Store, characterized the occasion as a significant day for spot BTC ETFs, noting that they had received nearly $20 billion in net inflows over the previous five months.

“Absolutely absurd and surpasses all pre-launch demand projections. In my opinion, this is not degen retail.” He wrote, “It is advisors and institutional investors who are continuing to gradually adapt.”

The Fidelity Wise Origin Bitcoin Fund, which has experienced its highest inflow since June 4, took the lead in the competition with $239.3 million. Subsequently, the Bitwise Bitcoin ETF, which generated more than $100 million, and BlackRock’s iShares Bitcoin Trust, which generated $79.6 million, followed.

In the same vein, the Ark 21Shares Bitcoin ETF experienced inflows of approximately $70 million, while the Greyscale Bitcoin Trust experienced its highest inflow of $37.8 million since early May during its inaugural October.

Some experts are describing the recent increase in Bitcoin ETF inflows as a “ideal storm” for crypto investments across the board, the result of a confluence of factors.

For example, Chris Aruliah, the director of institution for crypto exchange Bybit, identified the forthcoming US election as a significant factor. He stated, “As we approach the November election, investors may become more confident in their predictions that BTC’s bull trend will resume. There is an expectation of regulatory clarity, as both political parties in the US elections have made positive statements regarding cryptocurrency.”

In the same vein, Alicia Kao, the managing director of KuCoin, a cryptocurrency exchange, informed Cointelegraph that the trend is also being driven by the rising level of macroeconomic optimism.

In her opinion, the Federal Reserve has already begun to progressively reduce interest rates, which has alleviated concerns about a potential recession, as evidenced by the economic data released by various US agencies.

Additionally, she observed that hedge fund participation in digital assets has been consistently increasing, due to the global launch of spot crypto ETFs and the improvement of regulatory clarity.

“The percentage of traditional hedge funds that have exposure to digital assets has increased significantly from 29% in 2023 to 47% in 2022, with nearly half (47%) now doing so. Additionally, 67% of those hedge funds intend to maintain their current exposure in digital assets, while 33% intend to increase their digital asset investments by the end of 2024. This represents a significant increase in institutional confidence and has contributed to significant inflows into Bitcoin ETFs,” according to Kao.

Although retail demand is unquestionably a significant factor, the influence of institutional investors on these record-breaking inflows is substantial.

Mithil Thakore, CEO and co-founder of the Bitcoin trading protocol Velar, is of the opinion that institutions are currently in control and are responsible for a significant portion of the BTC that is being acquired through ETFs. Additionally, he stated:

“We are currently on the brink of approximately $20 billion in Bitcoin inflows, a figure that took gold over four years to achieve. It is unsurprising that the demand for Bitcoin through ETFs has been so robust, given the properties that have made it the best-performing asset of the past decade.”

Likewise, Ben Caselin, the chief market officer at VALR, is of the opinion that the recent increase in inflows to US spot Bitcoin ETFs can be attributed to Bitcoin’s resilience in both high- and low-interest environments.

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