Bitcoin ETF Record Biggest Weekly Outflows Of $328M, What’s Next?

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During the week up to April 26, 2024, Bitcoin Spot ETFs based in the United States underwent significant changes in investor inflows. A substantial weekly net withdrawal of $328 million was recorded, indicating a decline in demand for these ETFs. This sudden outflow may have set off a chain reaction, ultimately contributing to the subsequent drop in Bitcoin’s price.

Overview Of Bitcoin ETF Weekly Flow

The first day of the week was marked by vigorous trading, resulting in a combined total of $62.02 million flowing into various Spot BTC Exchange-Traded Funds (ETFs). In contrast, Grayscale’s GBTC experienced an outflow of $34.993 million in a single day. Fidelity’s FBTC reported a substantial one-day net inflow of $34.83 million. Additionally, BlackRock’s IBIT Bitcoin ETF received an inflow of $19.4 million, extending its streak of consecutive days with inflows to 70 since its launch.

On April 23, 2023, there was a positive development as Farside UK disclosed net Bitcoin ETF investments totaling $31.6 million. Notably, BlackRock’s iShares Bitcoin Trust (IBIT) and Ark 21Shares’ ARKB saw significant inflows during this period. In contrast, Grayscale experienced outflows. However, the volume of inflows decreased significantly compared to the previous day due to substantial outflows from GBTC.

After that, on April 24, Wednesday saw a significant change with a total of $120 million leaving the market. This event took place concurrently with a high point in trading activity. Amongst the various investment products, Grayscale’s GBTC experienced the most substantial outflow, while Fidelity’s FBTC recorded the largest inflow.

On Thursday, April 25th, there was a substantial increase in Bitcoin ETF redemptions, totaling approximately $217 million amongst the ten Spot Bitcoin ETFs. Grayscale’s GBTC saw the largest outflow with around $140 million withdrawn, while other ETFs also experienced notable withdrawals.

On Friday, April 26th, there were continuous outflows amounting to $83.6 million. Among these, Grayscale’s GBTC experienced slower outflows compared to previous days. Intriguingly, Ark 21Shares’ ARKB was the sole ETF that witnessed inflows during this period. Specifically, ARKB had a moderate inflow of approximately $5.4 million. Throughout the week, there was a substantial net outflow of around $328 million.

What’s Next For Spot BTC ETFs?

In the midst of a massive crypto market selloff, concerns about the future of Bitcoin Exchange-Traded Funds (ETFs) have surfaced. These fears come on the heels of a report suggesting a new drop in the value of these investment vehicles. Notably, the Depository Trust Company (DTCC)’s recent statement regarding the assessment of collateral for ETFs holding Bitcoin or other cryptocurrencies has left investors feeling uneasy.

The past few days have seen volatile changes in the U.S. Bitcoin ETF marketscape, marked by substantial withdrawals of funds. This shift has raised concerns among investors as to decreasing support from big financial institutions on Bitcoin. Additionally, this turn of events seems to have played a role in the recent downturn in the cryptocurrency market.

A new study by 10X Research has raised concerns about the Bitcoin Exchange-Traded Fund (ETF) landscape, as the Depository Trust & Clearing Corporation (DTCC) announced it would impose a 100% haircut on cryptocurrency-exposed ETFs from April 30. This news has sparked discussions about a possible reversal in Bitcoin ETF investments. Furthermore, the crypto market is experiencing heightened volatility and substantial withdrawals from US Spot Bitcoin ETFs.

The DTCC’s decision to withhold collateral value for ETFs based on cryptocurrencies as underlying assets has created ripples in the digital asset market. Notably, Bitcoin is exhibiting indications of forming lower peaks, and 10X Research predicts a possible downturn for Bitcoin ETFs.

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2024-04-29 10:18