On March 12, Bitcoin spot Exchange-Traded Funds (ETFs) witnessed a record-setting total net inflow of $1.05 billion.

This represents the largest single-day net inflow since the ETF's inception, indicating a significant rise of around 56% from the $673 million reported on Feb. 28. Notably, one factor contributing to the substantial influx into Bitcoin ETFs might be their consistent performance, surpassing the rate of newly mined Bitcoin supply.

Clive Thompson, a former managing director of wealth management with a background in Swiss Private Banking, highlighted in a LinkedIn post that on March 11, the new Bitcoin ETFs acquired roughly 7200 Bitcoins. This figure sharply contrasts with the average daily mined supply of 900 Bitcoins. Thompson pointed out that this disparity between demand and new supply led to a 5% increase in Bitcoin prices.

He emphasized the role of Genesis Holdings in shaping market dynamics. After filing for bankruptcy, Genesis Holdings began liquidating its GBTC shares, indirectly impacting Bitcoin sales. These sales, initiated on Feb. 28, seemed to conclude around March 13, according to Thompson. He suggested that the conclusion of Genesis's GBTC share sales could have significant implications for Bitcoin's price trajectory, anticipating a potential surge to new highs, potentially leading to increased inflows into Bitcoin ETFs.

Meanwhile, Eric Balchunas, a senior ETF analyst, provided insights into the remarkable trading volumes within the Bitcoin ETF market. On March 12, Balchunas noted that the market experienced its second-highest trading volume day for the ten spot Bitcoin ETFs, marking the best day in the past five weeks with a total volume of $8.5 billion.

The volume surpassed that of all but five stocks. Specifically, BlackRock’s spot Bitcoin ETF, IBIT, witnessed an extraordinary level of activity, doubling the trading volume of SPDR Gold Shares ETF (GLD). Furthermore, other ETFs like VanEck’s HODL and Invesco Galaxy’s BTCO saw substantial trading volumes of $150 million and $250 million, respectively, marking significant achievements for these funds.

The success of IBIT has sparked further interest in Bitcoin ETFs, with BlackRock, under Larry Fink’s leadership, seeking regulatory approval to expand its cryptocurrency offerings. This includes proposals for additional spot Bitcoin ETFs and inclusion in its Global Allocation Fund, alongside efforts to extend its reach to emerging markets in Latin America through the launch of the iShares Bitcoin Trust ETF’s Depositary Receipts in Brazil.

However, the path for new cryptocurrency ETFs, including those for Ethereum (ETH), faces regulatory hurdles. The SEC’s delay in approving or denying these filings until May has led to speculation among experts regarding the likelihood of approval.

The lack of communication between the SEC and ETF issuers like BlackRock has been identified as a key factor contributing to this uncertainty. Nonetheless, there is anticipation for upcoming meetings that could potentially influence the SEC’s stance on these innovative financial products.