- Bitcoin (BTC) ETF Inflow Slowdown Is a Short-Term Pause, Not the Start of a Worrying Trend: Bernstein
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This article discusses the recent slowdown in inflows into Bitcoin exchange-traded funds (ETFs) and why Bernstein analysts believe it is only a temporary pause, not the beginning of a negative trend.
Inflows Slow Recently But Remain Strong Overall
While inflows into Bitcoin ETFs have declined in April compared to March, they still remain relatively high. March saw record inflows totaling over $234 million across several Bitcoin ETFs. However, inflows slowed in early April to around $71 million.
Despite the slowdown, inflows are still significant and well above 2021 levels. The total assets under management for Bitcoin ETFs also continue to grow, reaching around $1.5 billion in April.
Slowdown Attributed Mainly to Holiday Season
According to Bernstein analysts, the recent slowdown can be attributed largely to the holiday season in Europe and North America. Trading volumes and interest typically decline during such periods.
Other factors like rising interest rates and inflation concerns may have also contributed to some investors taking a wait-and-see approach. However, this is viewed as a temporary effect.
Long-Term Trend Still Intact
While the month-to-month flows may fluctuate, Bernstein analysts stress the long-term trend is still positive. In their view, the leveling off in inflows is only a short-term pause, not the start of a sustained downturn.
Bitcoin ETFs remain a small portion of the total cryptocurrency market. As major exchanges work to implement the infrastructure and compliance needed to offer them, inflows are expected to continue growing over the long run.
Conclusion
After record inflows in March, Bitcoin ETFs saw a slowdown in April. However, Bernstein analysts believe this decline is a temporary blip attributed to the holiday season and other short-term factors. They emphasize the long-term trend is still positive for Bitcoin ETF inflows as more exchanges roll out offerings, providing investors with regulated access to cryptocurrency exposure.
