As an experienced financial analyst, I believe that the recent outflows from Bitcoin ETFs in the United States are a cause for concern but not necessarily a reason for panic. The net outflow of $83.6 million on spot Bitcoin ETFs is indicative of a lack of interest among institutional investors at the moment. This trend can be attributed to various factors such as monthly options expiry, hotter PCE inflation, and the DTCC’s update on collateral values for certain securities with Bitcoin or other cryptocurrencies as assets.
In recent U.S. trading sessions, there’s been a notable decrease in investment in spot Bitcoin ETFs, with a total withdrawal of approximately $166 million over the last few days. Grayscale GBTC experienced a similar trend, recording an outflow of around $82.4 million during this period. This data suggests that institutional investors are currently showing less enthusiasm for investing in a Bitcoin ETF.
I’ve identified two primary factors contributing to the recent market turbulence. Firstly, monthly options expiry and escalating PCE inflation have taken a toll on Bitcoin’s performance over the past few days. Secondly, the DTCC’s announcement regarding collateral value updates for certain securities, specifically ETFs with cryptocurrencies like Bitcoin as assets, has sparked panic within the financial sector.
The recent statement from Bloomberg analyst James Seyffart and Custodia Bank CEO Caitlin Long that the DTCC announcement on Bitcoin ETFs without collateral value for loans is “healthy” for the crypto market might seem contradictory at first. But in my perspective, it means that the crypto market can now operate independently of traditional financial institutions’ collateral requirements. This separation of the two markets could lead to more price discovery and volatility in the crypto space, which some investors see as a positive development.
Spot Bitcoin ETFs Saw $83.6 Million Outflows
Recently, Bitcoin ETFs indicated signs of healing with net inflows earlier in the week. However, a reversal occurred as investors withdrew funds, totaling $83.6 million in outflows for spot Bitcoin ETFs, according to Bloomberg and Farside Investors’ latest reports on April 27. The eleven listed spot Bitcoin ETFs endured another disappointing day with reduced trading volumes and buyer interest.
The Ark 21Shares Bitcoin ETF (ARKB) was the sole Bitcoin ETF to experience an investment inflow, totaling $5.4 million. Anticipation swirled around potential purchases from ARK funds, leading to this increase. In a surprising move, ARKB sold its entire holding in ProShares Bitcoin Strategy ETF (BITO). The shares price dipped by 1.84% during regular trading hours but rebounded slightly with a 0.61% rise post-market.
As a researcher studying the trends in Bitcoin Exchange-Traded Funds (ETFs), I’ve observed that both Fidelity Bitcoin ETF (FBTC) and Bitwise Bitcoin ETF (BITB) experienced withdrawals amounting to $2.8 million and $3.8 million, respectively, on Friday. This marks the second consecutive day of outflows for these two significant Bitcoin ETFs with substantial Bitcoin holdings.
The BlackRock iShares Bitcoin ETF (IBIT) and similar spot Bitcoin Exchange-Traded Funds (ETFs) experienced no inflows recently, causing unease among both individual and institutional investors. This week’s lack of investment in these Bitcoin ETFs might exacerbate concerns, potentially dampening market sentiment further.
The daily outflows of funds from Grayscale GBTC have diminished on Friday compared to previous days. Specifically, there was a decrease in outflow from GBTC, amounting to $57 million, down from $139.4 million the day before. Consequently, the total outflows from the Grayscale Bitcoin Trust now amount to $17.14 billion.
Bitcoin Can Still Recover From Here
In the past 24 hours, the value of Bitcoin (BTC) dropped by more than 2%, now hovering around the $63,000 mark. The lowest and highest prices during this period were $62,424 and $64,789, respectively. Additionally, there has been a notable decrease of 24% in trading volume as investors remain cautious, waiting for additional cues before making further moves.
Arthur Hayes, a co-founder of BitMEX, anticipates a rebound in stocks, cryptocurrencies, and Bitcoin starting next week. His optimistic perspective stems from the influx of $200 billion into the US Treasury General Account (TGA) due to tax payments from American citizens and the upcoming quarterly refunding announcement by the US Treasury Department scheduled for the same period.
This year, Republic First Bank was the initial regional bank to give in to the elevated interest rate pressures set by the US Federal Reserve.
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2024-04-27 11:50