Bitcoin ETFs Face Outflows Impact

Indra55

The introduction of the spot Bitcoin ETF in the United States last year stimulated institutional interest in cryptocurrencies. Within three months of its launch, all US Bitcoin ETFs collectively managed assets exceeding $12.5 billion.

However, investor interest in spot Bitcoin ETFs appears to be waning, with net inflows into ETFs recently slowing down. Several ETF issuers have reported significant outflows, with total outflows reaching $218 million in the past day.

According to data from Farside Investors, BlackRock's IBIT Bitcoin ETF experienced zero flows for the second consecutive day, while Fidelity's FBTC saw its first net outflow day, totaling $23 million.

Other US Bitcoin funds also experienced notable outflows. The Grayscale GBTC fund continued its outflow trend, with $139.37 million flowing out, while the ARKB fund under Ark Invest and 21Shares saw outflows of $31.34 million. Additionally, Valkyrie's fund saw outflows of $20.16 million, and Bitwise's fund saw outflows of $6 million.

In contrast, Franklin Templeton's EZBC became the only fund to have daily net inflows, attracting $1.87 million. Despite these outflows, net inflows into ETFs have exceeded $12 billion since their launch in January.

Why are Bitcoin ETFs experiencing outflows?

Earlier this week, James Butterfill, research director at CoinShares, explained that these outflows indicate a diminished interest in ETP/ETFs amid speculation about the Fed's potential delay in interest rate cuts.

Meanwhile, some market experts point out that a slowdown is a necessary condition for the market to catch its breath. Bloomberg senior ETF analyst Eric Balchunas reported that Fidelity's FBTC and BlackRock's IBIT broke the record for highest net assets within the first 72 days of their launch.

He said, "The self-holding of companies like IBIT and FBTC shows how overheated it all was, frankly, it should have caught its breath sooner."

Fidelity FBTC and BlackRock IBIT are particularly noteworthy because they are market leaders, collectively managing over $27 billion in assets.

However, reports suggest that Morgan Stanley plans to allow its 15,000 brokers to recommend spot Bitcoin ETFs to clients, which could reignite market interest.

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