BlackRock’s iShares Bitcoin Trust (IBIT) fund has received no new investments. This lack of flow does not necessarily indicate a decrease in investor interest. The lack of entries in BlackRock’s IBIT comes as Bitcoin consolidates.
BlackRock’s Bitcoin ETF experienced three consecutive days of no new investments. This is in stark contrast to other Bitcoin ETF investment products, which saw significant outflows totaling $328 million.
The iShares Bitcoin Trust (IBIT) had enjoyed a 71-day streak of continuous inflows before this recent trend of no new investments. Due to the current zero flow trend, some members of the community have interpreted this as indicative of declining investor interest in Bitcoin.
Bitcoin Spot ETF: BlackRock Null Entries Explained
However, Bloomberg ETF analyst James Seyffart explained that the pattern was common within the broader ETF market. Zero flows occur when there is no noticeable difference between the supply and demand of an ETF.
According to Seyffart, this disparity must be substantial enough to trigger the creation or redemption of ETF shares, a process that is executed in units. Market makers only intervene in the underlying market when the discrepancy exceeds a certain threshold:
“Minor mismatches will see the market makers handle trading of shares just like they would a stock. But it needs to be lopsided — more than a creation unit in either direction for market makers to tap the APs/underlying market.”
Therefore, the absence of inflows into the BlackRock IBIT ETF does not suggest a lack of trading activity. On the contrary, it indicates that the net flow is not significant enough to justify the creation or redemption of units.
Another Bloomberg ETF expert, Eric Balchunas, corroborated this notion, citing the iShares MSCI Emerging Markets ETF EEM, which saw $70 billion in volume between mid-January and mid-April despite recording zero daily flows. Regarding this, X user Trader T commented the following:
“0 flow is normal for well-established fund due to equilibrium between all market participants. Not sure what questions are, but keeping inflow for newly launched BTC ETFs are important. Larger size and sound liquidity can result in better recognition on Bitcoin as liquid asset.”
Why Do Bitcoin Spot ETFs Have So Low Inflows?
The lack of inflows into the BlackRock Bitcoin ETF has had an impact on the price of BTC, which has remained stagnant over the past week. Crypto analyst Skew noted that Bitcoin remains within a defined range between $72,000 and $61,000, with a point of correction (PoC) or mid-range pivot at $66,000.
The analyst highlighted price levels of specific interest for continued watching at the March low of $61,598. Also, the previous week’s low of $63,498. Skew explained the following:
“PoC is often an inflection zone for trends so backtesting from above or retesting from under can be important contextually. How the market trades around a PoC often with other respectful confirmations leads to the next move. By this I mean failure to auction higher or lower with respectful flows is often great confirmation to close out of trades or getting into trades. In hindsight the recent test of PoC here had confluence of the midrange and failure on each push higher so was a good point to hedge around.”
Despite these challenges, the emergence of ETFs has had a significant impact on the cryptocurrency market, with approximately $54 billion invested in various vehicles, attracting a wide range of investors. Hong Kong will host its inaugural Bitcoin and Ether ETF listings, signaling growing global interest and potential expansion of cryptocurrency investment opportunities in new markets.
By Leonardo Perez
