Last week, the US spot Bitcoin ETF market saw a notable shift in investor sentiment. Positive inflows were reported, ending a streak of outflows that had persisted for almost a month. The week ended with significant positive inflows of $116 million, a sign of growing interest in newly approved index funds.
Notably, a new player entered the market and made substantial investments, quickly becoming one of the the largest holders Bitcoin ETFs.
Bracebridge Capital Acquires Major ETF Holdings
Bracebridge Capital, a Boston-based hedge fund, said it owns $262 million worth of Ark Invest’s ARKB ETF. Additionally, they became the largest owner of Blackrock IBIT with an investment of $81 million.
Bracebridge Capital also holds $20 million in Grayscale Bitcoin Trust (GBTC), which saw negative outflows of $103 million during the same period. Eric Balchunas, ETF expert at Bloomberg describe Bracebridge Capital’s investment is considered a “wild” move, given the company’s significant acquisitions.
Also worth mentioning is the growing number of holders of each ETF, with IBIT showing 250 holders in the first quarter alone, which is notable for a recently launched product.
Hong Kong Bitcoin ETF Outflows Persist
In contrast, the Bitcoin ETF market in Hong Kong has seen slower but steady outflows. On Friday, May 10, 2024, there was an outflow of $6.3 million, followed by an outflow of $18.5 million on Monday, May 13, 2024. However, it should be noted that Bosera and Harvest do not have not yet communicated for Monday, according to Farside. data.
The outflows come amid rumors that Hong Kong-listed Bitcoin ETFs could soon become accessible to mainland Chinese investors.
Like before reportedRichard Byworth, managing partner of SyzCapital, has sparked speculation that Hong Kong-listed Bitcoin ETFs will be integrated into the Stock Connect system, potentially allowing mainland Chinese investors to access these funds.
Byworth’s remarks on social media highlighted ongoing discussions around this potential integration, which could lead to a significant influx of capital from mainland China into the Bitcoin ETF market.
The initial performance of the ChinaAMC Bitcoin ETF, which raised $121 million on its first day of tradinghas fueled optimism about the future of Bitcoin ETFs in Hong Kong.
Samson Mow, a prominent figure in the industry, expressed optimistic sentiments. At the same time, Brian HoonJong Paik, co-founder and COO of SmashFi, highlighted the potential socio-economic benefits of mainland China’s interest in Hong Kong Bitcoin ETFs.
Paik highlighted China’s immense wealth in real estate, suggesting that alternative investment opportunities could help stabilize the socio-economic landscape and alleviate social unrest.
As discussions continue, market participants are closely monitoring its potential impact on capital flows and overall adoption of digital asset funds in the region.
The market’s largest cryptocurrency has rebounded all the way to the $63,000 level, coupled with a 3% price increase in the last 24 hours alone.
Featured image from Shutterstock, chart from TradingView.com
