Spot Bitcoin ETFs Witness Fourth Consecutive Day of Outflows

Spot Bitcoin Exchange-Traded Funds (ETFs) have seen significant outflows for three to four consecutive days this week.

During this period, ten spot Bitcoin ETFs experienced a combined net outflow exceeding $740 million, with the Grayscale Bitcoin Trust (GBTC) leading the decline.

In March 2024, spot Bitcoin ETFs underwent substantial outflows for three to four days straight, with the total exceeding $740 million. The Grayscale Bitcoin Trust (GBTC) led these outflows, with over $1.4 billion withdrawn from the trust in a single week, setting a new record for cumulative outflows in ETF history. Despite the outflows, Bitcoin’s price still rose to over $67,000, buoyed by the Federal Reserve’s dovish stance, with analysts predicting a consolidation followed by a surge to new highs. Subscription volumes for BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Investments’ Bitcoin ETF (FBTC) slowed during the outflow period. Data from Farside Investors indicates that the outflows began on March 18, with $154.3 million exiting the funds. The trend continued on March 19 and 20, with outflows of $326.2 million and $261 million, respectively.

Eric Balchunas, a Bloomberg ETF analyst, noted that the recent sharp increase in outflows from GBTC suggests a “second wave” of investor withdrawals, with $1.4 billion exiting the trust in just one week.

This development sets a new record for cumulative outflows in ETF history, surpassing the outflows of all other ETFs since the beginning of the year.

“The more I think about it, the more likely the increase in flows is related to the scale and consistency of bankruptcies. February’s flows showed what retail outflows look like, smaller in scale and random. Moreover, any outflows from Gemini/Genesis could potentially be used to purchase BTC with cash, hence the market…”

– Eric Balchunas, March 22, 2024

Despite the significant outflows, Bitcoin’s price successfully climbed to over $67,000, driven by the Federal Reserve’s dovish stance.

Analysts remain optimistic about Bitcoin’s future, with some predicting a period of consolidation before a rally to new historical highs, especially considering the upcoming halving event next month.

However, Thursday’s Asian markets presented a different picture, with Bitcoin losing momentum compared to the ongoing rise in global stock markets and gold. The news of Bitcoin ETF outflows may have contributed to this stark contrast in performance.

Other notable Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Investments’ Bitcoin ETF (FBTC), also saw a slowdown in subscription volumes during the outflow period.

Despite recent challenges, these funds have still performed impressively overall, with net inflows reaching $11.4 billion since their inception, making them one of the most successful debuts in the ETF category.

Sentiment: Positive