Is the Bitcoin ETF craze already over?

Considered the epicenter of institutional adoption of Bitcoin, BlackRock's high-profile IBIT ETF has just recorded an unprecedented milestone since its launch last January. For the first time, the flagship fund has not convinced any new investors to bring in fresh capital. Could this no-entry day signal the end of the initial euphoria generated by spot Bitcoin ETFs?

The IBIT in a zone of turbulence!

April 24, 2024 will remain engraved as a pivotal date for the IBIT fund. BlackRock's Bitcoin ETF has had 71 consecutive days of uninterrupted inflows, a historic streak that has propelled the product into the realms of the most spectacular launches. However, a wind of panic now seems to be blowing.

The BlackRock teams were probably taken by surprise by this first day without an influx of new subscriptions. Despite the 15.5 billion dollars already garnered in a few months by the IBIT, this sudden stop fuels speculation about a possible loss of steam in the institutional appetite for Bitcoin.

A shaken Bitcoin ETF market

Beyond the specific case of BlackRock, it is the entire emerging market for spot Bitcoin ETFs which seems take a worrying pause. The latest figures show massive net outflows of $120.6 million on the day of April 24.

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This trend is particularly pronounced and worrying for the Grayscale Bitcoin Trust (GBTC), a veteran relegated to the background since January. The fund alone suffered $130.4 million in outflows that day according to analysts, continuing a hemorrhage which has already accumulated more than $17 billion in net losses.

A turning point for Bitcoin adoption?

While the causes of this turnaround remain to be precisely determined, several factors may be responsible. With the current fall in Bitcoin after just a few days of the Halving, investors seem to be hesitant about which path to take. They are probably wondering whether to withdraw their funds or continue accumulating for a possible future rise.

In addition, the geopolitical climate which is tense at the moment as well as the inflation rate which has exploded, is tragically influencing market prices. Regardless, this first for BlackRock's IBIT raises important questions about the future trajectory of Bitcoin ETFs.

After the celebrations of their sensational debut, Bitcoin ETFs now face their first real test of credibility. A test which could well decide whether or not the institutional craze for the crypto queen continues.

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