Bitcoin, the leading cryptocurrency, has rebounded to its typical trading price following a significant correction after the launch of a spot Bitcoin Exchange-Traded Fund (ETF). The price of Bitcoin reportedly fell by approximately 20% post-ETF launch, dropping to around $38,000 last week. However, recent data indicates that the excitement surrounding crypto ETFs is dwindling after just a few weeks of trading.

JPMorgan's View on ETFs:

JPMorgan reported that spot Bitcoin ETFs experienced net sales of approximately $15 million on January 26, the eleventh day of trading for these products. While this reversed a four-day streak of redemptions, the overall sales remained relatively modest.

The investment giant observed that Grayscale's Bitcoin Trust (GBTC) continued to see reduced outflows, while BlackRock's IBIT, the largest of the newly launched ETFs with around $2.2 billion in assets under management (AUM), showed signs of slowing sales.

Preliminary data, as reported by Walter Bloomberg, suggests a decline in transaction volumes, indicating waning initial hype around these ETFs and a shift towards a more normalized market flow. Despite recent fluctuations, Bitcoin's price remained resilient at around $42,000, with a 24-hour trading volume increasing by approximately 4% to $15.7 billion.

Cumulative transaction volume for SEC-approved Bitcoin spot ETFs in their first 11 trading days totaled around $1.67 billion, with a total net asset value of $26.74 billion.

Key Players:

Grayscale saw a single-day net outflow of $255 million on January 26, its smallest outflow since inception. Fidelity's FBTC led in single-day net inflows with around $100 million, followed by BlackRock's IBIT with a net inflow of $87.13 million.

Analysts suggest that outflows from GBTC could be attributed to factors like transitioning to Bitcoin ETFs, indicating early investors redeeming arbitrage opportunities.

Additionally, GBTC's higher management fees compared to other products likely incentivized investors to switch positions.