As a seasoned crypto investor with a few years under my belt, I’ve seen my fair share of market fluctuations. The recent net outflows from Bitcoin (BTC) ETFs are causing a sense of unease in the community, including myself. With over $226 million leaving these financial products in a single day and $564 million over the past three days, it’s hard not to feel a pang of worry.
Yesterday saw a significant withdrawal of $226.2 million from Bitcoin Exchange-Traded Funds (ETFs) in a 24-hour span, reflecting the current challenging price situation for bitcoin. This mass exit of funds recalls the events towards the end of April when an astonishing $1.2 billion was taken out of these BTC ETFs.
Over the last three days, ETFs have experienced outflows totaling $564 million, with Wednesday being an exception as it saw inflows. The potential outflows in the coming days could reach the magnitude of the over $1 billion withdrawals seen in April.
Fidelity’s GBTC experienced a drawback of $106 million, Grayscale’s GBTC recorded $62 million in redemptions, and ARK Invest’s ARKB noted $53 million in withdrawals. In contrast, IBIT, managed by BlackRock, attracted $18 million, marking its 44th consecutive day of positive fund inflows. No other ETF providers reported significant net outflows or inflows during this period.
As a researcher, I’d describe Wednesday as an unusual day this week with approximately $100 million in inflows to ETFs. The US Federal Reserve released its inflation report that day, revealing unexpectedly low inflation rates. This news sparked excitement in the market, pushing Bitcoin’s price up to nearly $70,000 from around $68,000, only for it to fall back below this level shortly thereafter.
Over the past week, Bitcoin (BTC) has had a hard time picking up speed despite a momentary surge on Wednesday. However, its progress was hindered following the US government’s announcement of 272,000 new jobs in the non-farm payroll report. This news triggered a massive selloff, resulting in the liquidation of approximately $450 million worth of Bitcoin.
Over the past week, bearing market trends for Bitcoin have triggered significant withdrawals from Bitcoin ETFs. This exodus of funds can be attributed to investors’ desire to minimize losses by selling off their Bitcoin ETF holdings ahead of potential further price drops. Additionally, recent approvals of Ethereum ETFs this summer may have enticed some investors to shift their resources into Ethereum ETFs once they become available. Consequently, these investors have liquidated their Bitcoin ETF positions upon learning about the Ethereum ETF approvals.
Image by Bianca Holland from Pixabay
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2024-06-14 21:16