NEW YORK, February 14, 2024 — On Tuesday, BlackRock’s spot bitcoin ETF, the iShares Bitcoin Trust (IBIT), experienced its highest net inflows since its launch, bringing in $493 million. This figure surpasses the previous daily net inflow record of $386 million set on January 12, the fund's second day of trading, according to BitMEX Research. Following Tuesday's influx, IBIT’s assets under management have surged to nearly $5.2 billion.

The BlackRock fund is among the top 7% of all ETFs in terms of size, as noted by Bloomberg Intelligence analyst Eric Balchunas. In comparison, Grayscale Investments’ Bitcoin Trust ETF (GBTC) remains the largest spot bitcoin ETF with $22.8 billion in assets. However, GBTC has seen a significant decline from its initial $28 billion in assets since its transition to an ETF on January 11, suffering from continuous net outflows.

Despite GBTC’s challenges, the combined net inflows for the nine other U.S. spot bitcoin ETFs have significantly offset GBTC's $6.5 billion in outflows. As of Tuesday, these funds have accumulated nearly $3.8 billion in net inflows. The $631 million in net inflows for the segment on Tuesday is the second highest since the funds began trading, following the record $655 million on their first trading day.

In addition to IBIT, Fidelity Investments' Wise Origin Bitcoin Fund (FBTC) is approaching $4 billion in assets under management. Balchunas highlighted on February 8 that IBIT and FBTC are the fastest-growing ETFs ever launched. Matt Hougan, chief investment officer at Bitwise, remarked during a panel at the Exchange ETF conference in Miami Beach that while he anticipated strong demand for these funds, the actual inflows have exceeded expectations. He also predicted a further increase in demand as these ETFs become available on national account platforms.

However, industry experts and analysts indicate that it may take time for many wealth management firms, such as registered investment advisers and wirehouses, to allocate client assets to spot bitcoin ETFs. Notably, financial giant Vanguard has opted not to allow trading of these new U.S. spot bitcoin ETFs on its brokerage platform.

Steve Kurz, the head of global asset management at Galaxy Digital, emphasized during Tuesday's panel discussion that there are several unique and fundamental reasons why investing in bitcoin makes particular sense this year.

One significant factor is the upcoming bitcoin halving event, scheduled for April. This event will reduce the block reward for mining bitcoins from 6.25 BTC to 3.125 BTC, a development that historically has acted as a catalyst for bull markets in the cryptocurrency space.

At the same time, Bitcoin's price was trading around $52,000 on Wednesday morning, marking a 20% increase over the past week.

Kurz highlighted that the convergence of these fundamental factors with enhanced market access is creating a strong foundation for continued growth. “The alignment of the narrative with the fundamentals is why we believe we're just at the beginning and can expect significant additional inflows,” Kurz stated.