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Bitcoin ETF Flows Turn Negative
Following a brief recovery in Bitcoin prices at the end of March, the net flows to Bitcoin exchange-traded funds (ETFs) have taken a hit at the beginning of the week. Data from BitMEX Research indicates that investments were in the negative territory yesterday, with outflows totaling $85.7 million.
Volatile Trends in ETF Flows
Interestingly, just last Thursday, the influx of funds into Bitcoin ETFs reached over $100 million for the third consecutive day, marking a weekly total of $845 million. This surge came after a bleak period the previous week, when all Bitcoin-tracking funds experienced outflows due to investor hesitancy amidst a downturn in crypto prices.
Despite the positive trend in recent days, one fund stands out for experiencing significant outflows: Graycale’s GBTC reported a massive $302.6 million in redemptions. This particular fund, along with 10 others, received approval from the U.S. Securities and Exchange Commission to commence trading in January. However, GBTC has consistently faced investor withdrawals since then.
Lolz. Its actually a $302.6 mln outflow for GBTC today — honestly higher than I expected. Thought this would have slowed down by now.
— James Seyffart (@JSeyff) April 1, 2024
Drivers of Outflows
The main reasons behind the ongoing outflows from GBTC can be attributed to bankrupt crypto companies redeeming shares and investors shifting towards funds with lower fees. Grayscale’s GBTC happens to have the highest fees among all the available funds, which could be dissuading investors from holding onto their positions.
While there were indications that the outflows were slowing down, the latest data signifies that the trend may persist for a while longer. Consequently, the price of Bitcoin has taken a hit today, with the cryptocurrency trading at $65,348 per coin according to CoinGecko—a notable 24-hour decline of nearly 6%. This dip comes after Bitcoin reached a new record high of nearly $74,000 in mid-March.
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