March 27, 2024
Bitcoin ETFs Witness $76M Net Outflows on Troubled 7th Day
Bitcoin ETF

Bitcoin ETFs Witness $76M Net Outflows on Troubled 7th Day

In a tumultuous turn of events, spot Bitcoin exchange-traded funds (ETFs) have witnessed $76 million in net outflows on their seventh day of trading, according to data from Bloomberg ETF analyst James Seyffart. The cryptocurrency market dubbed the “Cointucky Derby,” faced a challenging day, with Grayscale’s Bitcoin Trust (GBTC) leading the pack in net outflows.

Seyffart, in a January 23 post on X (formerly Twitter), expressed the severity of the situation, stating, “It’s been a bad day for Bitcoin ETFs in the Cointucky Derby.” Notably, Grayscale’s GBTC experienced the largest outflow to date, with $640 million flowing out on that day alone, contributing to a total outflow of $3.45 billion.

Despite the overall negative sentiment, Seyffart highlighted that the flows into spot Bitcoin ETFs remained positive. BlackRock, in particular, had a notable day, recording its third-largest day of positive flows, accumulating a total of $272 million in inflows.

“On a net basis, we have seen over $1.1 billion flow into spot bitcoin ETFs, even after accounting for the GBTC outflows,” Seyffart explained in an interview.

While the outflows from GBTC appeared relentless, Seyffart expressed optimism that the trend might subside in the coming fortnight. The significant outflows from Grayscale’s GBTC fund have been linked to substantial selling by the FTX estate.

Sources familiar with the matter revealed that the FTX estate had offloaded approximately two-thirds of its 22.8 million GBTC shares by January 22. This massive sell-off is estimated to contribute around $600 million to the total net outflows of $3.4 billion related to GBTC.

The cryptocurrency market’s recent challenges have also manifested in the price of Bitcoin, which experienced a notable decline from a high of $49,100 on January 10 to as low as $39,500 on January 23. At the time of reporting, Bitcoin is holding steady just above the $40,000 mark, according to data from TradingView.

Interestingly, this downward price action aligns with a sharp decline in open interest on Bitcoin futures on the Chicago Mercantile Exchange (CME). CoinGlass data reveals that open interest in the CME fell from a near-record high of $6.4 billion on January 12 to $4.4 billion at the time of publication, indicating a waning enthusiasm among institutional investors for leveraged exposure to Bitcoin. The evolving dynamics of the cryptocurrency market underscore the ongoing challenges and fluctuations faced by both retail and institutional participants.


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