BTC Price Faces Pressure Amid $621M Outflows from Bitcoin ETFs Last Week

• As the Federal Reserve adopts a more hawkish stance on future rate cuts, Bitcoin encounters selling pressure amidst significant outflows from spot Bitcoin ETFs.
• CoinShares’ latest data underscores substantial outflows from digital asset investment products, surpassing the $600 million mark in the past week.
• Grayscale’s GBTC ETF saw the largest outflow, registering a staggering $274.3 million last week.

This article delves into the latest crypto market movements, spotlighting Bitcoin ETF outflows and broader market sentiments.

Significant Outflows in Digital Asset Investment Products

According to CoinShares’ report, digital asset investment products experienced outflows totaling $600 million last week. These outflows were primarily a result of the Federal Reserve’s unexpected hawkish tone during the recent FOMC meeting, which prompted investors to scale back their positions in digital assets.

Surge in Bitcoin ETF Outflows

The majority of the outflows last week can be attributed to US spot Bitcoin ETFs. Notably, Grayscale’s GBTC ETF led the exodus with a massive $274.3 million in net outflows. Following closely were Ark Invest’s ARKB and Fidelity’s FBTC, which reported net outflows of $149.7 million and $146.3 million, respectively.

Conversely, BlackRock’s IBIT stood out as the only spot Bitcoin ETF to record net inflows, bringing in $41.6 million last week. Despite this, the cumulative net inflows for spot Bitcoin ETFs since inception now stand at $15.1 billion.

Before this downturn, spot Bitcoin ETFs enjoyed a 19-day streak of substantial inflows, collectively amassing over $4 billion. However, this trend was abruptly reversed last Monday, when they recorded net outflows of $64.9 million. Following the FOMC meeting, the outflows intensified, averaging $200 million per day over three days.

Bitcoin Leads Global Investment Product Outflows

Bitcoin emerged as the primary contributor to global investment product outflows, with an alarming $621 million exiting the market within a week. This bearish sentiment was further compounded by $1.8 million flowing into short Bitcoin positions, leading to a 7% decline in Bitcoin’s price over the period.

“These outflows and the resultant price drop saw total assets under management (AuM) decline from above $100 billion to $94 billion in one week,” noted James Butterfill in his CoinShares report.

Trading volumes also saw a downturn, falling to $11 billion last week from the year’s average of $22 billion. Despite this decline, last week’s trading volume still significantly outpaced last year’s $2 billion weekly average.

Regionally, the United States accounted for the majority of outflows, totaling $565 million. However, bearish sentiment wasn’t confined to the US alone. Canada, Switzerland, and Sweden also reported net outflows of $15 million, $24 million, and $15 million, respectively. In contrast, Germany bucked the trend, registering net inflows of $17 million.

Conclusion

The recent market activity underscores a growing cautiousness among investors, spurred by the Federal Reserve’s more hawkish stance. The substantial outflows from Bitcoin ETFs and overall digital asset investment products highlight a shifting market sentiment. As the crypto market navigates these turbulent times, it remains crucial for investors to stay informed and make data-driven decisions.