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Bitcoin ETFs See $200M Net Outflows in Fed, CPI Jitters

Jun 11, 2024
    U.S.-listed spot bitcoin exchange-traded funds (ETFs) recorded the second consecutive day of outflows driven by Grayscale’s GBTC.The outflows are likely due to traders derisking ahead of U.S. CPI and the Fed rate decision.
As a researcher with a background in finance and experience following the crypto market closely, I believe that the recent outflows from U.S.-listed spot bitcoin exchange-traded funds (ETFs) are due to traders derisking ahead of key macroeconomic reports. The second consecutive day of net outflows totaled $200 million, with most of it coming from Grayscale’s GBTC.In the past two days, there have been net withdrawals from U.S.-based Bitcoin ETFs listed on spot exchanges. This could be due to investors reducing their risk exposure before crucial economic reports set to be released on Wednesday.

The eleven ETFs managed by SoSoValue reported a significant withdrawal of $200 million on Tuesday, marking the largest outflow since May with a record $580 million. This mass exodus occurred during a Bitcoin sell-off when the asset dipped to $66,200 before bouncing back.

Among various comparable accounts, Grayscale’s GBTC was responsible for the largest portion of approximately $120 million in withdrawals. Since its launch in January, GBTC has gained notoriety as the poorest-performing ETF by total outflows, with a staggering accumulated sum of over $18 billion in redemptions.
As an analyst, I’ve observed that Ark Invest’s ARKB, Bitwise’s BITB, Fidelity’s FBTC, and VanEck’s HODL experienced outflows during a recent period, with the amounts ranging from a high of $56 million for ARKB to a low of $7 million for HODC. No new inflows were recorded for any of these ETFs.

Traders believed the recent withdrawals could be precautionary measures taken before this week’s upcoming events: the CPI report due on Wednesday and the concluding day of the two-day FOMC meeting, where the Federal Reserve will make its monetary policy determination.

As a researcher studying financial markets, I can tell you that the market sentiment is currently cautious ahead of tomorrow’s Consumer Price Index (CPI) release and Federal Open Market Committee (FOMC) meeting. Additionally, this FOMC gathering will unveil the Dot Plot, which offers insight into the Fed’s anticipated number of interest rate adjustments for the remainder of 2024.

However, the firm added that its long-term bullish view remained intact.

In spite of temporary challenges, our belief is that this could be a promising time to acquire more cryptocurrency. There are positive developments on the horizon, including the potential launch of an ETH spot Exchange-Traded Fund (ETF) and the ongoing competition between Biden and Trump to court crypto supporters.

An extra challenge for investors could arise from Federal Reserve Chair Janet Yellen’s speech scheduled for this coming Friday. Her remarks might trigger responses in volatile assets like cryptocurrencies due to prior indications.

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2024-06-12 11:13