In a challenging week of stark trade deficits, Spot Bitcoin Exchange-Traded Funds (ETFs) persistently experienced outflows. This series of consecutive daily reductions suggests a possible waning in bullish sentiments among institutional traders. This downturn mirrored the cryptocurrency’s market performance as Bitcoin’s value tumbled to a weekly low of $61,370.
With February and early March witnessing Bitcoin’s impressive bull run, interest in Spot Bitcoin ETFs soared, driving the cryptocurrency’s price to an unprecedented high of $73,737. Riding this wave of investor interest, ETFs established new transaction records for exchange-traded funds in the United States. However, they soon took a downward turn, setting a new, less commendable record of five continuous days of outflows, surpassing the previous four-day outflow streak recorded in January.
BitMEX Research reported that during this five-day period, outflows reached $154.4 million, $326.2 million, $261.6 million, $93.1 million, and $51.6 million, consecutively. Simultaneously, Grayscale’s GBTC made a troubling new record for daily outflows.
Grayscale, the world’s largest crypto asset manager underwent tremendous redemptions, losing nearly 10,000 BTC or over $642.5 million on a single day. This instance marked the largest single-day outflow in GBTC’s history.
This outflow from Grayscale was not unexpected, as the fund has demonstrated a consistent pattern of daily outflows since its inception. However, it was the diminished inflow into other Spot ETFs like BlackRock and Fidelity that raised eyebrows, an unusual occurrence given that their substantial inflows have consistently been able to counterbalance GBTC’s outflows.
BlackRock, often a popular target for considerable inflow, set a new record low of just $18.9 million on Friday, March 22nd. Similarly, Fidelity’s inflow plummeted to $5.9 million on Monday, March 18th. As of now, Bitcoin is trading at $65,122.
Looking forward, the possibility of Bitcoin returning to $73,000 or higher depends on its capacity to recover from the recent series of Spot Bitcoin ETF outflows. If outflows continue, the Bitcoin price could be adversely affected. Nevertheless, last week’s lagging inflow did not correlate with low trading activity. Cumulative trading volume across the 10 ETFs is currently at $164 billion, with $22.71 billion of the total trading volume recorded last week alone.
In the wake of such extensive outflows, the coming days stand as a critical phase in determining Bitcoin’s future valuation. Despite the challenging week, the upcoming Bitcoin halving event holds potential for a rally toward Bitcoin’s previous highs. Further developments will determine if this proven, strategic event will be effective enough to influence financial recovery.
