What is the outlook for Bitcoin ETF liquidity?

Ritu77

On March 18th, over $640 million worth of Bitcoin flowed out of Grayscale's Bitcoin ETF, marking the largest outflow since the fund converted to a spot Bitcoin ETF on January 11th.
At the same time, according to data from Farside Investors, the second-largest fund, Fidelity's Bitcoin ETF, saw a sharp drop in inflows to $5.9 million, the lowest level on record.
The Grayscale Bitcoin ETF experienced its largest single-day decline in history.
According to CoinGecko, as of the time of writing, the price of Bitcoin is $63,624, down 13.75% from its recent all-time high of $73,797 on March 14th.
Some market commentators attribute the recent downturn in Bitcoin's price to slowing Bitcoin ETF flows, the upcoming halving event, and the March 20th meeting of the Federal Open Market Committee (FOMC) in the United States.
However, other analysts remain optimistic about the future prospects of Bitcoin ETF flows.
Grant Englebart, Vice President of investment firm Carlson Group, told Bloomberg that only "a few" advisors have seen clients allocate funds to Bitcoin ETFs, noting that the average allocation in such cases is 3.5% of the total funds.
X Bloomberg ETF analyst Eric Balchunas, commenting on an interview, stated that this aligns with what he has heard from Bitcoin ETF issuers — only a few early adopters have received meaningful allocations to spot Bitcoin ETFs.
"Thus far, only a few have dipped their toe into BTC, they're the 'early adopters,' they're asking, and then getting an allocation," Balchunas said.
"Advisors haven't been out soliciting the rest of their clients. All of this flow is coming from inbound interest," added Balchunas, implying that inflows into Bitcoin ETFs may continue to increase in the future.
Other commentators point out that the remaining Bitcoin on GBTC's books (about 370,000 bitcoins) is a reason for the long-term bullish outlook on ETF flows.
"GBTC has 378,000 bitcoins and sold 96,000 today. The good news is they can't keep up at this pace for too long," cryptocurrency market commentator Allesandro Ottavani wrote in an X post on March 19th.
On January 11th, the Grayscale Bitcoin Trust converted from institutional funds to a spot ETF, while other issuers such as BlackRock and Fidelity also approved nine other spot Bitcoin ETFs.

Sona59

When there's a rise, there will be a fall; it's all about assessing the level at times like this.

Samiksha

Bitcoin has experienced quite a significant drop recently.