0
0
Bitcoin ETFs See Positive Cash Flow After Weeks of Outflows
Following a period of significant outflows, Bitcoin exchange-traded funds (ETFs) experienced a noteworthy shift as all of these investment products observed positive cash flow for the first time on Friday. Data from Farside Investors revealed that this turnaround was primarily driven by investors injecting more capital into Grayscale’s Bitcoin Trust (GBTC) than was withdrawn since it transitioned into an ETF in January. The fund had been facing continuous outflows as investors redeemed shares, often seeking alternative funds with lower fees.
First time ever 1D flows all green, no red for the Bitcoin Bunch. Not going to spike the football like some did during the outflow period but will point out that over 95% of the ETF investors HOLD-ed during what was a pretty nasty and persistent downturn. Will same happen next… pic.twitter.com/3l3uwwmqGy
— Eric Balchunas (@EricBalchunas) May 6, 2024
Notably, on Friday, GBTC witnessed a $63 million increase. When combined with investors allocating capital across various other crypto funds, the total inflow into the Bitcoin ETF market amounted to $378 million on that day. This turnaround marks a significant shift, especially considering the previous week’s record-breaking outflows of over half a billion dollars. This came after a period of waning investor interest in these products.
In January, the Securities and Exchange Commission approved 11 spot Bitcoin ETFs following years of applications. These funds enable ordinary investors to purchase shares that mirror the cryptocurrency’s price through brokerage accounts. Initially, they garnered immense popularity with billions of dollars flowing into these funds. The surge in ETF interest is attributed to driving up Bitcoin’s price, which reached a new peak of $73,747 in March, as reported by CoinGecko.
However, the initial enthusiasm waned in recent months. Furthermore, the Federal Reserve indicated a reluctance to lower interest rates, and geopolitical tensions in the Middle East prompted investors to shy away from “risk-on” assets like Bitcoin. The continuous outflows from these funds exert downward pressure on Bitcoin’s price, which currently trades below both its March peak and the 2021 high of $69,044.
Friday’s positive cash flow provides a glimmer of hope. Could a sustained shift in investor sentiment pave the way for a renewed upward trajectory in Bitcoin’s price?
Image/Photo credit: source url
