Collectively, the launch of the spot BitcoinBitcoin +0.5%Exchange Traded Funds (ETFs) has been the most successful ETF debut in history. A couple of key milestones stand out: No other ETF had experienced $3 billion of inflows in its first month, Bitcoin had two—Blackrock’s IBIT and Fidelity’s FBTC. Altogether, Bitcoin ETFs have attracted an impressive $17 billion of inflows during their first nine months, shattering the previous full year record by QQQInvesco QQQ Trust 0.0% of $13 billion1. IBIT also achieved another milestone by maintaining the 10th longest inflow streak on record, with 71 consecutive days of positive inflows from its launch.
This record-breaking period shows the importance of the Bitcoin ETFs and their unique ability amongst financial assets to generate massive inflows. Although inflows have slowed in recent months, they have still outpaced bitcoin’s price action. While bitcoin’s price has consolidated within a descending channel since March, inflows have continued to build.
The divergence between flows and price may provide key insights into this consolidation period and future price movement. First, it suggests that ETF buyers are relatively price-insensitive, continuing to accumulate positions despite price declines. Second, these investors are less likely to panic-sell, potentially cushioning the downside during corrections. Third, market corrections can occur through sharp price drops or prolonged consolidation, and ETF holders appear to be steering bitcoin toward the latter, resulting in extended periods of stability. Finally, while inflows tend to correlate with price increases, their steady accumulation builds pressure, gradually pushing bitcoin through key resistance levels.
This week, bitcoin’s price broke through one of those key resistance levels, hitting 8-week highs and marking the first higher high since March. This move has sparked excitement for a potential end-of-year rally.