"What Happened to Bitcoin ETF?" Newsletter: Continued Wave of Inflows

Welcome to "What Happened to Bitcoin ETF?”

In this week's edition, we delve into the key highlights from May 20th to May 24th, offering a concise and engaging analysis of the ETF market. Here’s what you’ll find:

• AUM and Price Trends: Explore the changes in Assets Under Management (AUM) for U.S. and Hong Kong ETFs.

• BTC Holdings Fluctuations: Get insights into the weekly BTC flow dynamics.

• GBTC Outflow Analysis: Understand the impact of GBTC outflows on the Bitcoin market.

• Future Outlook: A sneak peek into what’s coming next week.

Dive into the data with us and uncover the critical insights shaping the Bitcoin ETF landscape!

1/ Total AUM and ETF Price Dynamics:

Weekly AUM Overview:

FThe total Assets Under Management (AUM) began at $58.72 billion on May 20th, slightly increasing to $58.82 billion by May 24th. This increase came in despite the sharp Bitcoin price drop on May 24th after the U.S. Composite PMI data came in hot, lowering expectations for the Fed's rate cut this year.

This trend highlights the resilience of investor sentiment and the persistent interest of institutional investors in Bitcoin ETFs as a valuable asset for enhancing overall portfolio performance this year. The market witnessed a notable recovery and growth, driven by these key factors.

The total AUM of Bitcoin ETFs is now approaching its all-time high of $60 billion, recorded in early April.

🇭🇰 Hong Kong ETF AUM Overview:

The total AUM of the Hong Kong Spot Bitcoin ETF experienced modest fluctuations throughout the week, starting at $239,621,000 on May 20th and rising to $245,490,000 by May 24th. This period marked a cumulative increase in AUM of $5,869,000, despite the Bitcoin price dipping by 2.14%.

Interestingly, there was a net inflow of 167 BTC into the holdings of three asset management firms during this period. This indicates a positive investor sentiment and increased interest in the Bitcoin ETF within the Hong Kong market.

2/ BTC Holdings Weekly Flow:

Ending Holdings on May 24 (WoW Change):

• GBTC (Grayscale): 289,041 BTC (+86 BTC)

• IBIT (BlackRock): 287,168 BTC (+10,408 BTC)🚀

• FBTC (Fidelity): 160,904 BTC (+2,645 BTC)

• ARKB (Ark 21Shares): 48,445 BTC (+1,064 BTC)

• BITB (Bitwise): 36,185 BTC (+436 BTC)

• HODL (VanEck): 9,786 BTC (+198 BTC)

• BRRR (Valkyrie): 8,561 BTC (+0 BTC)

• BTCO (Invesco Galaxy): 7,275 BTC (+313 BTC)

• EZBC (Franklin Templeton): 6,148 BTC (+0 BTC)

• BTCW (WisdomTree): 1,237 BTC (+74 BTC)

• DEFI (Hashdex): 178 BTC (0 BTC)

Total: 854,926 BTC (+15,224 BTC)

🇭🇰 Hong Kong ETF Holdings on May 17 (WoW Change):

• ChinaAMC (9042): 1,567 BTC (-33 BTC)

• Harvest Global (9439): 888 BTC (+5 BTC)

• Bosera Hashkey (9008): 1,204 BTC (+195 BTC)

Total: 3,659 BTC (+182 BTC)

3/ GBTC(Greyscale)'s Outflow Trend:

Last week, the flow dynamics for GBTC demonstrated a notable shift, indicating increased interest in Bitcoin ETFs from institutional investors. The week saw a net inflow of 86 BTC into GBTC, showcasing a positive trend compared to prior periods of outflow.

Additionally, BlackRock's IBIT is showing significant growth, with its total AUM reaching 287,168 BTC, almost surpassing Grayscale's GBTC at 289,041 BTC. As BlackRock's IBIT nears this milestone, the impact of outflows from GBTC is diminishing, becoming less significant than it has been over the past five months.

• Note: All data sources are from the Bitcoin ETF Fund Flows.

4/ Looking Ahead:

Bitcoin ETFs End The Week With 15K BTC Inflow, Michael Saylor Hails Milestone

The Spot Bitcoin ETFs recorded an impressive inflow of over 15,000 BTC this past week, surpassing a month’s worth of new BTC mined. This surge in inflows could potentially lead to a supply shock if the robust flows continue.

BlackRock continues to dominate the Bitcoin ETF market, closing the gap with Grayscale. BlackRock’s IBIT holds 284,526 BTC worth $19.32 billion, while Grayscale’s GBTC holds 289,257 BTC valued at $19.64 billion.

MicroStrategy CEO Michael Saylor praised these ETFs' robust performance, noting, "Bitcoin held by 28 Spot ETFs is approaching 1 Nakamoto," indicating we could soon see 1 million BTC locked into these investment products.

Currently, U.S. Bitcoin ETFs hold 855,702 BTC, while global ETFs hold 991,336 BTC. This suggests that the total could surge past 1 million BTC soon.

This trend is bullish for Bitcoin's price. ETFs bought 15,421 BTC this week, far exceeding the 13,500 BTC mined in a month, potentially leading to a supply crunch as Bitcoin exchange reserves diminish due to significant whale accumulation.

5/ What’s Hot This Week?:

U.S. House Blocks CBDC Initiative

In a noteworthy development, the U.S. House of Representatives has passed the CBDC Anti-Surveillance State Act, preventing the Federal Reserve from issuing a Central Bank Digital Currency (CBDC). This decision saw overwhelming support from Republican members and a few Democrats, highlighting a rare moment of bipartisan agreement in American politics.

Key Takeaways:

• CBDC Concerns: Despite its potential benefits, a CBDC is seen by many as a tool for government surveillance, raising significant privacy issues.

• Global Context: China's e-CNY, launched during the last Winter Olympics, has since faded into obscurity, underscoring the challenges of such digital currencies.

• International Implications: Various other developed countries are also exploring CBDCs. It is crucial for their legislative bodies to consider the potential consequences, such as increased cash demand and the rise of underground financial activities.

This decision by the U.S. House serves as a critical reminder of the importance of safeguarding financial privacy and freedom.

6/ This Week’s Bitcoin Mindset:

Why Investing in Bitcoin Now is Like Investing in the Early Internet

The number of Bitcoin wallets holding over $1000 and the price of Bitcoin have a strong linear relationship, with an R-squared value of 98%. This means if the number of Bitcoin users doubles, the price of Bitcoin increases exponentially.

Metcalfe's Law states that a network's value grows proportionally to the square of its users. Bitcoin's value follows this principle closely.

Fred Krueger recently highlighted this in a tweet, showing the 98% R-squared correlation between wallet addresses and Bitcoin price.

Investing in Bitcoin now is like investing in the internet in the early 2000s. Just as early internet investors saw massive gains as adoption grew, Bitcoin investors can expect similar exponential growth.

Don't miss this opportunity. Investing in Bitcoin today could lead to exponential growth in your investment.

7/ 🐦 Hot Tweet of the Week

1) Saifedean is GOAT

2) Political game theory in the play

3) In fact, we don’t need politics for Bitcoin self-custody

🍫CRYPTO CRUMBS ON THE TRAIL 🍫

Dive into this week's crunchy bites of important news, serving up the freshest updates and insights from the crypto world.

Here's what's on the menu:

1. Bitcoin analyst sees 'several more weeks' before BTC price breaks $70K

   Bitcoin faces stiff resistance and may need "several weeks" before a BTC price breakout, says new analysis.

2. Crypto Exchange Coinbase Adds Bitcoin Ecosystem Altcoin to Its Listing Roadmap

   Coinbase, the largest crypto exchange in the US, has announced the potential future listing of an altcoin within the Bitcoin (BTC) scaling...

3. Robert Kiyosaki Advises Buying Bitcoin Before Price Explodes — Warns of Bonds Crashing – Markets and Prices ...

   Robert Kiyosaki has warned about the bond market crashing, urging investors to buy real assets, like bitcoin, before their prices "explode." 

4. Donald Trump, once a Bitcoin skeptic, declares support for crypto in Truth Social post

   Donald Trump, once a Bitcoin skeptic, declares support for crypto in Truth Social post

5. Unique Bitcoin Course to Be Launched by Swiss University

   The University of Applied Sciences in Business Administration Zurich will be offering a unique Bitcoin course starting in March 2025,...

PS - If your life is difficult, it means you are on the right path.

That’s what life is all about. As Frank Sinatra’s music “That’s Life” says:

Stay charged,

SmashFi Team

P.S. - Follow me on X (@brianhoonjong) for daily doses of insightful updates on Bitcoin ETFs and beyond! 🚀🐦

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“What Happened to Bitcoin ETF?” Newsletter: Dissecting the daily crypto craze with sharp insights and electrifying updates.

Disclaimer: This newsletter is for the brainy and the brave. It's for informational purposes only and not a substitute for investment advice. Always do your own research.