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Investor Interest in Bitcoin ETFs Declining
Investor interest in spot Bitcoin exchange-traded funds (ETFs) appears to be declining, evidenced by outflows totaling $218 million in the past day. Data from Farside Investors reveals that BlackRock’s IBIT Bitcoin ETF experienced its second consecutive day of zero flows, while Fidelity’s FBTC saw its first daily net outflow, amounting to $23 million. Other US Bitcoin funds also saw significant daily outflows, with the Grayscale GBTC fund losing $139.37 million, Ark Invest and 21Shares’ ARKB fund witnessing an outflow of $31.34 million, Valkyrie’s fund experiencing $20.16 million in outflows, and Bitwise seeing a negative flow of $6 million. Franklin Templeton’s EZBC was the only fund with daily net inflows, attracting $1.87 million.
Despite the substantial outflows, net inflows into the ETFs have exceeded $12 billion since their launch in January.
Reasons Behind Bitcoin ETF Outflows
Speculations regarding potential delays in rate cuts by the Federal Reserve have been cited as a primary driver for the recent outflows from ETP/ETF investors, as explained by James Butterfill, CoinShares’ Head of Research. Market experts also view the slowdown in inflows as a necessary breather for the market. Bloomberg Senior ETF analyst Eric Balchunas pointed out that Fidelity’s FBTC and BlackRock’s IBIT set records for the highest net assets within the first 72 days of launch, indicating an overheated market that was due for a pause. He expressed his perspective on Twitter, stating:
“The league of own-ness of IBIT, FBTC et al shows how overheated it all was, a breather was overdue to be honest.”
It is noteworthy that Fidelity FBTC and BlackRock IBIT collectively manage over $27 billion in assets, showcasing their significant market leadership. Furthermore, there is anticipation surrounding reports of Morgan Stanley planning to allow its 15,000 brokers to recommend spot Bitcoin ETFs to clients. This development could potentially reignite interest in the market.
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