Bitcoin ETFs have seen consecutive inflows, ranging from $100-900 million daily, totaling over $4.3 billion in 10 days. Institutional investors are flocking to Bitcoin ETFs like IBIT, attracted by reduced volatility, reinforcing Bitcoin's image. The lower volatility of ETFs could curb runaway gains, altering Bitcoin's appeal to retail investors and pricing them out.
Bitcoin ETFs have seen inflows between $100-900 million for 10 consecutive days, reaching a total increase of more than $4.3 billion. ETFs like IBIT are steadily losing their volatility, attracting new institutional investment. Although Bitcoin has always been used as "digital gold," lower volatility also reduces the possibility of runaway gains. This ETF volatility trend is attracting corporate money, but retail investors may lose their influence in the market.
These Bitcoin ETF gains are especially impactful because the market has had some difficult moments this month. Sure, IBIT has reported inflows in 30 of the last 31 days, but the broader ETF market saw multiple periods of outflows in May. Nevertheless, an upward trend tentatively began in the middle of the month, and these gains have persisted since then. Bitcoin's price has been doing well lately, with encouraging signs for future growth.
In addition, large corporations have been accumulating BTC, and the trend could be reflected in the ETF market. Analyst Eric Balchunas seems to believe that institutional investors are driving Bitcoin ETF inflows thanks to their surprisingly low volatility.
Specifically, although BTC is typically treated as a volatile asset, it can also hedge against inflation and recessions. Bitcoin ETFs like IBIT have been steadily decreasing in volatility over the past 90 days, while traditional assets like gold are becoming more volatile.
This trend is likely encouraging big players to drive huge inflows into ETFs. However, this approach might not be as bullish as it seems at first glance. Bitcoin products were some of the biggest ETF launches in history, as this volatility creates the potential for runaway gains.
If this volatility decreases, it could change the entire profile of the average ETF investor. Balchunas called this a "dilemma" as different investors want different things. Bitcoin ETFs permanently transformed the crypto industry, and this volatility assessment is an indicator of an overall trend.
