Bitcoin ETF frenzy fizzles as inflows halve overnight

The Bitcoin buying bonanza via new exchange-traded funds (ETFs) proved short-lived, with inflows halving to $200 million on day two according to early J.P. Morgan estimates. The prior day saw a feeding frenzy with $629 million flooding into the long-awaited investment vehicles tracking the cryptocurrency’s spot price.

The 11 freshly minted ETFs marked a critical juncture for Bitcoin’s mainstream acceptance after regulatory barriers kept institutional investors at bay. But the initial pent-up demand appears to have waned rapidly after the landmark debut. Still, at $27.9 billion overall, assets under management remain substantial.

BlackRock and Fidelity’s offerings lead inflows after two days with approximately $500 million and $423 million accumulated respectively. Figures from rivals Bitwise, Franklin and VanEck remain under wraps. Speculation around potential approval has pumped Bitcoin up 60% since September.

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Frenzied trading greeted the ETFs’ opening day with $4.6 billion changing hands, powered by Grayscale, BlackRock and Fidelity. Grayscale’s Bitcoin Trust suffered $478 million in outflows as investors took chips off the table after its conversion from closed-end fund status.

Bitcoin is down 1.3% as of 12:30 GMT trading at $42,569.