This week marked a significant uptick in spot Bitcoin ETF activity as inflows reached an impressive $2.75 billion. This figure represents a staggering increase of nearly 4.5 times the previous week’s $608 million. Concurrently, Bitcoin prices soared past $109,000, achieving a level not seen since January, and even climbed to $111,980 on May 22. Such figures indicate a robust investor interest as the rally continues to gain momentum.
Spot Bitcoin ETF Inflows Surge
According to Farside data, spot Bitcoin ETFs attracted $2.75 billion this week, sharply up from $608 million the prior week. This significant increase aligned closely with Bitcoin’s ascent beyond its January peak of $109,000.
On May 21, just as Bitcoin reached a new high, investors poured in $607 million into these ETFs. The following day, on May 22, Bitcoin continued its upward trend, hitting $111,980, demonstrating the eagerness of investors to capitalize on new highs.
BlackRock’s IBIT Leads Flows
On May 23, ETF flows totaled a modest $212 million. Notably, BlackRock’s IBIT stood out by bringing in $431 million, extending its inflow streak to eight consecutive days. In contrast, Grayscale’s GBTC witnessed an outflow of $89 million, while ARK 21Shares’ ARKB lost $74 million. This trend indicates a clear investor preference for larger funds with lower fees and broader access.
Market Sentiment Pulls Back
Following the peak, Bitcoin’s prices experienced a slight retracement, trading near $108,150 at the time of publication. The Crypto Fear & Greed Index also dipped from an ‘Extreme Greed’ reading of 78 to 66, categorized as ‘Greed.’ This shift suggests that some investors may be taking profits amid a volatile market.
CryptoQuant analyst Crypto Dan commented on the situation, stating on May 22 that ‘overheating indicators such as the funding rate and short-term capital inflow remain low compared to previous peaks, and profit-taking by short-term investors is limited.’ His analysis implies that the current rally is not driven by overly speculative investments.
Record Monthly Inflows In Sight
As of now, spot Bitcoin ETFs have amassed approximately $5.40 billion in inflows for May. This figure is edging closer to the previous monthly record of $6.50 billion achieved in November 2024.
With just five trading days remaining in May, the potential exists for new all-time inflow records. The consistent demand emphasizes the growing popularity of ETFs as a hassle-free method for investors to gain Bitcoin exposure without dealing with the complexities of wallets and private keys.
The appetite for spot Bitcoin ETFs is on the rise, driven by investor preference for straightforward, regulated products. Major issuers, especially BlackRock, appear well-positioned to capitalize on this trend.
While there is a possibility of a market correction if sentiment continues to cool, the ongoing strength of institutional flows suggests that there is still considerable potential for further price appreciation.
Featured image from Gemini Imagen, chart from TradingView
