For bitcoin ETFs, zero-day inflows are perfectly normal and should not be misinterpreted as a failure of the products themselves, says James Seyffart, a Bloomberg ETF analyst.
On most days, the "vast majority" of all U.S. ETFs see zero inflows - which is perfectly normal for all ETFs in the sector, Seyffart said in an April 16 X post .
"On any given day, the vast majority of ETFs will have ZERO flow numbers - this is very normal. There are about 3,500 ETFs in the US. Yesterday, 2903 of them had a flow of exactly zero."
Several market commentators have expressed concern about the low inflows into US Bitcoin ETFs. BlackRock's Bitcoin ETF fund was the only one to see inflows this week for two consecutive trading days - between April 12 and 15.
BlackRock was the only fund to see inflows between April 12 and 15. Source: Farside Investors
Seyffart said the flows are not a cause for concern and are typical of most ETFs because of the way new inflows are recorded.
In order for an ETF to record new inflows or outflows, there must be a significant enough mismatch between supply and demand to warrant the creation or destruction of new fund holdings, which are issued in "creative units," Seyffart explained.
"This occurs ONLY when there is a mismatch between supply [and] demand. And this mismatch must be large enough to justify the use of the underlying market and a ~larger mismatch than the creation unit," Seyffart added.
Creation units are the "lots" within which ETF shares are created and redeemed.
"Each ETF can have a creation unit of different sizes. In the case of spot Bitcoin ETFs, these are batch sizes ranging from 5,000 to 50,000 shares," - he said.
In four of the last six trading days, all ten U.S. spot bitcoin products have seen net outflows , with sales by the Grayscale Bitcoin Trust (GBTC) far outstripping inflows into new funds.
According to Farside Investors, Bitcoin ETFs saw a net outflow of $58 million on April 16. The largest outflow of funds was GBTC, which saw outflows of $79.4 million and $12.9 million from the ARK 21Shares Bitcoin ETF (ARKB).
The largest inflow was the Blackrock iShares Bitcoin ETF (IBIT), which generated $25.8 million. Four of the funds, including Bitwise and Invesco Galaxy, saw no new inflows.
On April 14 and 15, all of the combined ETFs recorded net outflows of $55.1 million and $36.7 million, respectively.
