Bitcoin ETFs have seen inflows between $100-900 million for 10 consecutive days, reaching a total increase of over $4.3 billion. ETFs like IBIT are consistently losing their volatility, attracting new institutional investment.
Although Bitcoin has always been used as “digital gold,” lower volatility also reduces the chance of runaway gains. This ETF volatility trend is drawing corporate money, but retail investors may lose their market influence.
Bitcoin ETFs Continue to Attract Fresh Capital
These Bitcoin ETF gains are especially impactful because the market has had a few rough patches this month. Sure, IBIT has reported inflows on 30 of the last 31 days, but the broader ETF market saw multiple outflow periods in May.
Nonetheless, a bullish trend tentatively began in the middle of the month, and these gains persisted ever since.
Bitcoin ETFs’ Consecutive Inflows. Source: HODL15 Capital
Bitcoin’s price has been doing well lately, with encouraging signs for future growth. Additionally, major corporations have been stocking up on BTC, and the trend might be reflected in the ETF market.
Analyst Eric Balchunas seems to believe that institutional investors are pumping 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 consistently decreasing in volatility for the last 90 days, while traditional assets like gold are becoming more volatile. This trend is likely encouraging big players to fuel massive ETF inflows.
Nonetheless, this approach might not be as bullish as it looks on the surface. Bitcoin products were some of the biggest ETF launches in history, as this volatility creates the potential for runaway gains.
If this volatility goes down, it might change the entire profile of the median ETF investor. Balchunas called this a “conundrum,” as different investors want different things.
Bitcoin ETFs permanently transformed the crypto industry, and this volatility assessment is one indicator of an overall trend. The ETF issuers are acting while their products receive these inflows, consistently purchasing close to 4,000 BTC on a daily basis.
Between the issuers’ appetite and other corporate holders, retail investors may get priced out of Bitcoin altogether.
For now, though, these ETF inflows are just another barometer for Bitcoin’s success. Over the last month, there haven’t been any wild price swings, but BTC has posted very consistent gains.
