Bitcoin Spot ETF Crosses $20B Net Inflow Driven by Pent-up Demand

The cumulative inflows into the Bitcoin spot exchange-traded funds (ETFs) surged past $20 billion on Wednesday after a combined net inflow of $1.5 billion in the past four days.

Data from Sosovalue confirms the latest milestone, which was achieved after just ten months of market debut. For context, 11 spot Bitcoin ETFs started trading on January 11 after the Securities and Exchange Commission approved the funds.

Bloomberg’s senior analyst Eric Balchunas also highlighted the landmark inflow, stating in a tweet on Thursday that the cumulative flows were one of the most important metrics for an ETF. Notably, this was the first time the funds reached $20 billion. It is also one of the fastest ETFs to breach the inflow mark.

Bitcoin Spot ETFs’ Journey to $20B Cumulative Inflow

The Bitcoin products had a swift start after their market debut, recording a staggering $628 million inflow on the first day. The funds continued in this trajectory as statistics pointed to pent-up demand for alternative exposure to Bitcoin.

Interestingly, these inflows came despite massive outflows from the Grayscale Bitcoin Trust (GBTC). For context, GBTC has seen a cumulative net outflow of $20 billion since it converted its trust fund to an ETF in January.

Notably, the BlackRock iShare Bitcoin Trust (IBIT) has been a major source of inflows, recording a cumulative net inflow of $22.46 billion. These giant strides saw the asset manager overtake Grayscale to become the largest holder of Bitcoin and Ethereum.

The spot Bitcoin ETFs now hold Bitcoin worth $64.46 billion, representing 4.82% of the asset’s circulating supply. Meanwhile, the issuers would have an impressive cumulative net asset of $49.55 billion if the funds Grayscale transferred from its trust fund were removed from the equation.

Bitcoin Outperforms Gold in ETF Inflows

Despite having an asset under management of $122 billion, the 20-year gold ETFs had a worse start than Bitcoin. Balchunas noted that it took gold ETFs about five years to attain a cumulative net inflow of $20 billion.

Putting that into perspective, it means that gold ETFs saw an average of $4 billion cumulative inflow every year. It also signals that Bitcoin ETFs grew more than five times faster than gold’s.

Furthermore, if Bitcoin spot ETFs continue to grow at this pace, they will match gold’s $122 billion net asset in less than three years. At the current pace, they would also produce a $1.29 trillion fund in the next 20 years.

Meanwhile, market pundits have predicted that Bitcoin would match gold’s market cap. For instance, SkyBridge’s managing partner, Anthony Scaramucci, asserted that Bitcoin will trade closely or even reach gold’s market cap in the coming years.

At the time of writing, Bitcoin was trading at $66,952 with a market cap of $1.32 trillion.