“Web 3.0: Exploring the Rise of Bitcoin ETFs and Its Impact on the Market”

Web 3.0 ETFs See Strong Inflows, BlackRock’s IBIT Receives Majority of Capital

Web 3.0 exchange-traded funds (ETFs) had a successful week, with over $2.2 billion in net inflows from Feb. 12–16. According to Bloomberg analyst Eric Balchunas, this volume surpassed all other 3,400 ETFs available in the US.

The iShares Bitcoin Trust (IBIT) from BlackRock received the most capital, with positive flows of $1.6 billion during the week. Balchunas pointed out that this accounts for 50% of BlackRock’s total net ETF flows, out of 417 ETFs.

Among the top spot Bitcoin (BTC) ETFs with billions in assets, Fidelity’s Wise Origin Bitcoin Fund saw significant inflows of $648.5 million in the last five trading sessions. The Ark 21Shares Bitcoin ETF also received $405 million during this time, while the Bitwise Bitcoin ETF saw $232.1 million in capital inflows.

Grayscale Bitcoin Trust Outflows Affect Newly Approved Spot Bitcoin ETFs

The performance of other recently approved spot Bitcoin ETFs is being hindered by outflows from the Grayscale Bitcoin Trust. The fund experienced $624 million in withdrawals from Feb. 12–16 as investors continued to sell. Since its conversion from an over-the-counter product to a spot ETF on Jan. 10, the Grayscale fund has seen a total of over $7 billion in capital outflows.

Bitcoin ETFs Driving Cryptocurrency’s Price Gains

The recent surge in Bitcoin’s price can be attributed to the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) on Jan. 10. This has been a major factor in the cryptocurrency’s 91% increase over the past four months.

In the week following the approval, Bitcoin saw a 7% gain and is currently trading at $51,434, representing a 24% climb in February.

The impact of the new ETFs is not limited to the market sentiment, as major banks and financial institutions have also taken notice. In a letter dated Feb. 14, a trade group coalition representing Wall Street’s biggest firms requested the SEC to consider modifications to the Staff Accounting Bulletin 121 to allow banks to act as custodians for BTC funds.