The main driving force behind this price increase can be attributed to increased inflows into BTC Spot ETFs. As expected in previous weeks, the outflow from the Grayscale Bitcoin ETF (GBTC) is expected to decline after the first few weeks of trading. This expectation came true: GBTC outflows showed a significant decline in the last days of January and continued to decline in February.
Daily outflows from GBTC during the first two weeks after approval averaged about $500 million. However, over the past week, total outflows from GBTC amounted to approximately $415 million, which translates to a daily average of approximately $83 million. This represents a nearly 85% reduction in outflows compared to the first two weeks of trading.
The striking correlation between the declining outflows from GBTC and the upward trend in prices is also evident when we examine the total daily inflows into BTC Spot ETFs. The substantial reduction in GBTC outflows began on January 26 and coincided with the start of consistent inflows into BTC Spot ETFs, resulting in 11 consecutive days of net inflows starting precisely on January 26.
Furthermore, there is a strong correlation between the size of GBTC inflows and the decline in outflows. While GBTC recorded cumulative outflows of $415 million last week, marking a significant decline from previous weeks, BTC Spot ETFs saw total net inflows of approximately $1.2 billion over the same period, marking the highest weekly inflows since their launch .
Among the newly launched BTC ETFs are Blackrock (IBIT) maintains its lead with approximately $4.2 billion in assets under management (AUM), followed by Fidelity ETF (FBTC) with approximately $3.5 billion in assets under management. Notably, a third ETF surpassed $1 billion in assets under management last week, while the BTC ETF offered by Ark & 21Shares (ARKB) now has $1.02 billion in assets under management. Additionally, it is notable that this past week witnessed the first daily outflow from a BTC ETF other than GBTC. Specifically, the Galaxy & Invesco ETF (BTCO) experienced outflows of approximately $17.5 million on Friday.
Trading volumes remain exceptionally high, with cumulative volume of approximately $5.5 billion recorded over the past week, equating to a daily trading volume of approximately $1.1 billion. Since their inception, cumulative trading volumes have reached $35.6 billion, with an average daily trading volume of approximately $1.7 billion.