Bitcoin exchange-traded funds (ETFs) on Wall Street experienced five consecutive days of net outflows as the price of Bitcoin contracted significantly last week.
The flows had previously contributed to driving the price of the cryptocurrency to a record high of $73,000 earlier in 2024. However, the recent decline in its price is thought to have dampened investor enthusiasm for the ETFs. At one juncture this week, bitcoin dropped as low as $60,760.
Bitcoin has recovered from the week’s losses, but s still 3.4% down from its 7 day highThe collective outflows from the 10 ETFs amounted to $888 million, as per BitMEX Research data. Notably, Grayscale’s GBTC experienced a particularly substantial outflow on March 18 2024, setting a record for the day. This five-day period of continuous net outflows marks the lengthiest observed to date, surpassing a four-day streak recorded in January 2024.
The significant outflows were mirrored by meager inflows. Blackrock’s IBIT, which commands nearly half of the market share, registered record-low inflows of $49.3 million on March 20 2024, only to see that record surpassed on March 22 2024, when IBIT attracted just $18.9 million in new capital.
Similarly, Fidelity’s FBTC, the third-largest spot bitcoin ETF, experienced record-low inflows, receiving a mere $2.9 million on March 21 2024.
Although the outflows coincide with a decline in bitcoin’s price, additional factors might explain the substantial outflows. Bloomberg ETF analyst, Eric Balchunas, suggested that GrayScale’s exceptionally large outflows could be attributed to trading activities by the digital financial firm, Genesis.
Nope. In fact, the exact opposite is true, the new 'Boomer' ETF investors are the strong ones (as we predicted), it's other bitcoin owners behind the selling pressure. I'll explain: the nine new Bitcoin ETFs have taken in about $1.2b in past 5 days as price declined 8%. $GBTC had… https://t.co/X6UXyBrGy8
— Eric Balchunas (@EricBalchunas) March 22, 2024
Investors will closely monitor daily data to discern whether the $888 million that exited the ETFs was merely a temporary fluctuation or a sign of a more significant pullback for the world’s largest cryptocurrency.
Bitcoin traders will also be monitoring the upcoming ‘halving,’ a scheduled network update set for April 2024, which will halve the financial rewards for miners responsible for verifying new transactions on the network.
EXPLAINER | The Most Anticipated Cryptocurrency Event of 2024, The #Bitcoin Halving, Explained
Through embedding a total supply and halving event directly into the Bitcoin code, the monetary system of Bitcoin becomes immutable and resistant to alteration.
This 'hard cap'… pic.twitter.com/cID1rPMS7J
— BitKE (@BitcoinKE) March 17, 2024
This event, occurring every 4 years, is anticipated to have a long-term bullish impact on bitcoin’s price, according to analysts.
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