Bitcoin ETF hype no more? BlackRock exec has this to say now…

• Investors withdrew $563.7 million, signaling a potential sentiment shift post-inflows
• BNP Paribas revealed its Bitcoin investment, marking a reversal in attitude

Bitcoin [BTC], at the time of writing, appeared to be recovering from its recent dip below $60,000. However, it wasn’t all good news as spot BTC exchange-traded funds (ETFs) experienced a break in their inflows after a remarkable 71-day streak.

In fact, according to a Bloomberg report, investors withdrew worth $563.7 million from BTC ETFs on 1 May. This marked the largest single-day outflow since these spot ETFs’ debut in January, signaling a potential shift in investor sentiment after a prolonged period of inflows.

Robert Mitchnick clears the confusion 

Clearing the air around the same, Robert Mitchnick, Head of Digital Assets for BlackRock, in a recent interview said, 

“Don’t be fooled…the current lull is likely to be followed by a new wave from a different type of investor.”

Here, the exec might be referring to a resurgence of interest in Bitcoin among institutional investors, including sovereign wealth funds, pension funds, and endowments. 

Something similar was confirmed when BNP Paribas, one of the largest banks in Europe, made its play by purchasing shares in BlackRock’s iShares Bitcoin Trust (IBIT).

According to a Form 13F filing with the U.S. Securities and Exchange Commission (SEC), BNP Paribas, Europe’s second-largest bank, purchased 1,030 IBIT shares for $41,684.10 in Q1 2024. Each share was priced at $40.47, significantly lower than the current value of a single Bitcoin.

Interestingly, back in September 2022, Sandro Pierri, Head of the fund management group BNP Paribas Asset Management, had said,

“We are not involved in cryptocurrencies and we don’t want to be involved.” 

What this demonstrates is a reversal in the bank’s position, while also reflecting a newfound interest or willingness to engage with Bitcoin as an investment asset.

Remaking on the same, Coinbase CFO Alesia Haas, in a conversation with CNBC, said, 

“Well, ETFs have unlocked a flywheel of engagement on our platform. Yes, we saw $11 billion of inflows into ETFs but, we also saw an increase in consumer trading on our platform…”

Growing acceptance of digital assets

All this has further resulted in a horse race among various Bitcoin ETFs. Topping the charts right now are IBIT and Grayscale’s GBTC. 

Source: Sosovalue

In conclusion, institutional interest in BTC and Bitcoin ETFs signals the growing acceptance of cryptocurrencies. BlackRock’s educational efforts towards Bitcoin and Ethereum [ETH] ETFs and their adoption, as highlighted by Mitchnick, further highlight a shift towards recognizing digital assets’ potential in portfolios.