Bitcoin ETFs See Largest Inflows in Over a Month as Market Stumbles

ETF investors are taking advantage of the low crypto prices as Bitcoin ETFs saw close to $290 million in inflows on July 8.

US-based spot Bitcoin ETFs saw some impressive inflows yesterday, attracting $295 million. BlackRock's iShares Bitcoin Trust was the most successful with $187.2 million in inflows. Meanwhile, BlackRock’s tokenized USD Institutional Digital Liquidity Fund surpassed $500 million market cap, making it the first tokenized treasury fund to do so. Additionally, DigitalX got approval to launch the second Bitcoin ETF on the ASX, while VanEck and 21Shares amended their filings for spot Ether ETFs.

Bitcoin ETFs Attract $295 Million in a Day

United States-based spot Bitcoin exchange-traded funds (ETFs) have seen their largest day of net inflows in over a month amid a declining crypto market. On July 8, the 11 funds collectively attracted $295 million. This was the first day in the last three trading weeks that net inflows across all funds were positive.

Bitcoin ETF flow table (Source: Farside

The largest inflow was seen in BlackRock’s iShares Bitcoin Trust ETF, which received $187.2 million. Fidelity’s Wise Origin Bitcoin Fund followed with an inflow of $61.5 million. Additionally, the Grayscale Bitcoin Trust recorded a rare day of positive capital movement, securing $25.1 million in inflows.

The influx of funds happened amidst broader market concerns about massive BTC sales by the German government and the Mt. Gox repayments. The German government has transferred more than 26,200 BTC to exchanges and market makers. As of now, it still holds 27,460 BTC worth about $1.57 billion in reserve, according to Arkham Intelligence data.

Meanwhile, there are concerns that $8.5 billion in BTC could enter the market in the coming months as the defunct Japanese crypto exchange Mt. Gox started compensating creditors who lost their funds in a 2014 hack. Despite these fears, some analysts believe that the concerns about Mt. Gox Bitcoin sales might be a bit exaggerated.

BTC 7d price charts (Source: CoinMarketCap)

The price of Bitcoin has been on a downward trend over the past two trading weeks, plummeting to as low as $53,600 on July 5. At press time, BTC was trading hands at $57,498.07 after its price managed a slight 0.18% increase throughout the past day. The crypto king is, however, still down by more than 17% on its monthly time frame.

BlackRock’s Tokenized Fund Hits Major Milestone

Meanwhile, the BlackRock USD Institutional Digital Liquidity Fund is also performing well and has reached a $500 million market cap, making it the first tokenized treasury fund to achieve this milestone. BlackRock's BUIDL now holds about $502.8 million worth of tokenized Treasurys less than four months after its launch, according to Ethereum block explorer Etherscan

This achievement came after the acquisition of more BUIDL by real-world asset tokenization firm Ondo Finance, which uses it as a backing asset for its OUSG token. 

BUIDL also surpassed the Franklin OnChain U.S. Government Money Fund (BENJI) as the world’s largest tokenized treasury fund in late April, less than six weeks after its launch on Mar. 15. It has maintained the top position since.

BUIDL’s price is pegged 1:1 with the U.S. dollar and pays daily accrued dividends directly to investors each month through its partnership with real-world asset tokenization platform Securitize. Ondo’s OUSG is the largest holder of BUIDL at $173.7 million, while stablecoin issuer Mountain Protocol also holds BUIDL to back its permissionless yield-bearing stablecoin, USDM.

In January, BlackRock CEO Larry Fink stated that blockchain tokenization could enhance the efficiency of capital markets. Boston Consulting Group agrees with this, and estimates that tokenization will become a $16 trillion market by 2030. 

Beyond U.S. Treasurys, other assets like stocks and real estate can also be tokenized. Despite the peak of real-world asset transactions in April of 2024, the number has declined significantly since then, according to Dune Analytics data from Crypto Koryo.

WisdomTree, Ondo Finance, Backed Finance, Matrixdock, Maple Finance, and Swarm are among the top firms in the real-world asset tokenization space.

DigitalX to Launch Second Bitcoin ETF on ASX

Blockchain-focused asset manager DigitalX received regulatory approval to launch its spot Bitcoin ETF, becoming the second Bitcoin ETF to trade on the Australian Securities Exchange (ASX). The DigitalX Bitcoin ETF, which is listed under the ticker BTXX, will debut on July 12 at 10 a.m. local time. 

CEO Lisa Wade described the approval as a "watershed moment," since the ETF provides ASX customers with direct access to Bitcoin via a regulated and liquid fund structure. DigitalX’s chair, Toby Hicks, is also excited about this new development. He believes it is an indication of the growth and development of the digital assets market in Australia.

DigitalX has partnered with K2 Asset Management to serve as the responsible entity and issuer of the spot Bitcoin ETF. Additionally, DigitalX will collaborate with cryptocurrency-focused investment firm 3iQ to promote and distribute the product both in Australia and internationally. 

This launch comes after  the recent approval of VanEck’s spot Bitcoin ETF on June 15, which started trading on June 20. VanEck's Bitcoin ETF (VBTC) closed its first trading day with $1.3 million in volume, which was much lower than the $450 million daily average of the nine US-based spot Bitcoin ETFs during their initial 10 trading days.

Australian fund manager Betashares is also seeking approval to launch a Bitcoin ETF on the ASX, according to an April report from Bloomberg.

VanEck and 21Shares Amend Filings for Spot Ether ETFs

In the Ethereum ETF realm, asset management companies VanEck and 21Shares have amended their S-1 registrations with the United States Securities and Exchange Commission (SEC) to list and trade shares of a spot Ether ETF. On July 8, VanEck amended its Form S-1 registration statement to seek final approval from the SEC for its Ethereum ETF, while 21Shares filed a similar amended form for its Core Ethereum ETF. Both filings stated that the launch would happen "as soon as practicable after the effective date" of the registration but did not specify a launch date on U.S. exchanges.

These amended filings represent the final stage of approvals required by the SEC before asset management firms can list shares of spot Ether ETFs. Bitwise filed its own amended registration on July 3, and experts predict that other companies will follow suit in the next week. 

On May 23, the SEC approved spot Ether ETF 19b-4 filings from eight asset managers, including VanEck, 21Shares, and Bitwise, with final approvals anticipated in July. SEC Chair Gary Gensler indicated in a June Senate Banking Committee hearing that the commission might approve the S-1s "sometime over the course of this summer" without actually specifying a date.

VanEck initially filed its application for a spot Ether ETF in January, after the SEC's approval of spot Bitcoin ETF shares. The approval process may have faced delays amid reports that the SEC was considering whether to classify ETH as a security. However, Consensys’ legal team reported in June that the commission decided to drop its investigation into Ethereum’s security status.