A year ago, Samara Cohen, Chief Investment Officer for ETFs and Index Investments at BlackRock, identified a significant suppressed demand for Bitcoin. In response, she and her team launched one of the first spot Bitcoin ETF products in the U.S. The move has drawn numerous investors, including many cryptocurrency enthusiasts on Wall Street.
Cohen believes that packaging Bitcoin in an ETF is a more effective way to meet market demand. Presently, the total market valuation of all 11 spot Bitcoin ETFs exceeds $63 billion, with a total inflow approaching $20 billion. In just the last five trading days, net inflows into these spot Bitcoin ETFs have surpassed $2.1 billion, with BlackRock accounting for half of these investments.
This surge in Bitcoin trading comes as the cryptocurrency hit its highest price since July, trading over $68,300. At the end of the third quarter, Bitcoin's price had risen about 140% year-over-year, outpacing the S&P 500 as these spot token funds grow in tandem with the cryptocurrency's market cap. Cryptocurrency-related stock, Coinbase, closed up approximately 24% this week, marking its best performance since February of this year.
Cohen notes that part of their strategy to attract clients to their funds includes highlighting the benefits of exchange-traded products (ETPs) to cryptocurrency investors. According to 13F filings, 80% of the buyers of these new spot Bitcoin products in the U.S. are direct investors. These filings provide quarterly data on stock positions held by large investors. Cohen revealed that of these direct investors, 75% had never previously held iShare, one of the world's largest and most renowned ETF providers.
Before the SEC approved the Bitcoin spot funds earlier this year, investors had several methods to purchase and store cryptocurrencies. Centralized exchanges like Coinbase were among the most user-friendly options for U.S. investors. However, the high-profile introduction of Bitcoin ETPs demonstrated to Cohen and others on Wall Street that cryptocurrency exchanges weren't fully meeting digital asset investors' needs.
