The last week was difficult for spot Bitcoin ETFs as they failed to attract strong inflows day after day. As a result, these spot Bitcoin ETFs saw consecutive outflows every day last week, suggesting that the bullish sentiment among institutional traders may actually be waning. This appears to have been reflected in the price of Bitcoin, as the cryptocurrency fell as low as $61,370 over the week.
Bitcoin ETFs are seeing continued outflows
Investor interest in spot Bitcoin ETFs surged in February and early March amid the Bitcoin bull run, driving the price to an all-time high of $73,737.
This maximum investor interest resulted in the ETFs setting new trading records for exchange-traded funds in the US. However, these ETFs have now set a negative record of five consecutive days of outflows, surpassing a four-day outflow streak from January.
According to data from BitMEX Research, these ETFs recorded five-day consecutive outflows of $154.4 million, $326.2 million, $261.6 million, $93.1 million, and 51, $6 million. At the same time, Grayscale's GBTC set a new record for the most daily outflows.
BitMEX also announces that the world's largest crypto asset manager recorded redemptions of 9,539.7 BTC worth over $642.5 million on Monday, the largest single-day outflow in GBTC history.
[1/4] Bitcoin ETF Flow – March 22, 2024
All data in. 5th day of net outflows. Total net outflow of $52 million for the day. Blackrock with a record low inflow of $18.9 million pic.twitter.com/63u297xh8d
March 23, 2024
Grayscale's outflow wasn't particularly surprising considering the fund has seen consistent daily outflows since inception. The surprise came from very weak inflows into other spot ETFs such as BlackRock (IBIT) and Fidelity (FBTC), whose huge inflows have always offset GBTC's outflows.
Of particular note is the fact that Blackrock (IBIT), which has always been the destination of the majority of inflows, hit a new low in inflows of $18.9 million on Friday, March 22nd. Fidelity, on the other hand, also saw a decline in inflows to just $5.9 million on Monday, March 18.
Can Bitcoin price recover?
The big question now is whether Bitcoin can stage a strong recovery and reclaim its recent all-time high of over $73,000. A continued outflow from spot Bitcoin ETFs could further weigh on Bitcoin price.
Interestingly, the weak inflow does not really have to do with low trading activity as trading volume remained significant throughout the week. Data shows that the cumulative trading volume of the 10 ETFs now stands at $164 billion, up from $22.71 billion in trading volume last week.
After a week of heavy outflows, the coming days will be crucial in determining the next big move in Bitcoin price. Despite the difficult week, Bitcoin still has a chance to rise back to $73,000 or higher, especially with the next Bitcoin halving approaching.
Featured image from Pexels, chart from TradingView
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