According to DLNews, Bitcoin exchange-traded funds (ETFs) have experienced their most successful week since their introduction in January, marking a significant milestone in their growth trajectory. Data from SoSoValue indicates that Bitcoin ETFs acquired over $3.3 billion worth of Bitcoin in the week ending November 22. With Bitcoin trading consistently above $90,000 during this period, ETF issuers purchased more than 30,000 Bitcoins, which is approximately ten times the amount of newly minted Bitcoin. This surge in acquisition was described by Eric Balchunas, an ETF analyst at Bloomberg Intelligence, as "Pac-Man mode activated," highlighting the aggressive buying trend.
Despite the initial surge, the momentum appears to have slowed, with approximately $438 million being withdrawn from Bitcoin ETFs at the start of the following week, as reported by SoSoValue. Nevertheless, the dozen funds that collectively hold over 5% of the global Bitcoin supply remain among the most successful ETFs since the investment vehicle gained popularity in the 1990s. Although Bitcoin ETFs are smaller compared to more established funds like the Vanguard S&P 500 ETF, which manages assets exceeding $530 billion, they have reached significant milestones at an unprecedented pace. BlackRock's IBIT, for instance, achieved a market value of $40 billion just 211 days after its launch, a record previously held by BlackRock's IEMG, which took over three years to reach the same mark.
The record inflows last week coincided with BlackRock's introduction of new Bitcoin ETF options, amounting to nearly $2 billion in notional exposure. This level of exposure on the first day is considered remarkable, according to Balchunas. Bitcoin ETF options provide investors the ability to buy or sell Bitcoin at a specific price on a predetermined date, similar to stock options, without the need for crypto-specific platforms. ETFs have significantly contributed to Bitcoin's recovery this year, driven partly by institutional investments. Bitcoin reached $73,000 in March, surpassing its previous record set in 2021. After maintaining a level around $60,000 for much of the year, it surged again following the November 5 presidential election, reaching an all-time high just below $100,000 last Friday. Factors contributing to Bitcoin's recent rally include the Republican victory in the US elections, central banks reducing interest rates, and MicroStrategy's largest Bitcoin purchase to date. Bitcoin ETF issuers collectively hold 1.1 million tokens and are anticipated to surpass Satoshi Nakamoto, the pseudonymous creator of Bitcoin, as the largest holder by the end of the year.
