Bitcoin Spot ETF

Bitcoin Spot ETFs Reach Record Outflow Numbers Amid Market Crash

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The United States Spot Bitcoin ETFS market is bleeding, with reports unveiling outflows exceeding $500 million in a single day. This unexpected development emerges amidst the broader market crash for Bitcoin, which has been witnessing a string of declines for the past month.

Spot Bitcoin ETFs Experience Massive Outflows

For the first time since its launch, ten Spot Bitcoin ETFs in the United States have witnessed record-breaking outflows. On Wednesday, May 1, Spot Bitcoin ETFs collectively recorded a staggering outflow of $563.7 million. 

This massive sell-off comes after the Federal Open Market Committee (FOMC) meeting spanning from April 30 to May 1, during which Federal Reserve (FED) Chair, Jerome Powell announced the decision to maintain interest at their current levels. Despite expectations for a rate cut, the decision to keep rates unchanged swiftly affected BTC‘s price, triggering further declines in the pioneer cryptocurrency.

According to data from Farside, a London-based investment management company, Fidelity Wise Origin Bitcoin Fund (FBTC) experienced the largest outflow of $191.1 million, amongst the ten Spot Bitcoin ETFs. This was followed by Grayscale Bitcoin Trust ETF (GBTC) witnessing approximately $167.4 million outflows. 

Recording its first outflow since its launch in January, iShares Bitcoin Trust (IBIT) managed by global asset management company, BlackRock, saw a whopping $36.9 million in outflows. Towards the end of April, IBIT also saw zero outflows for three consecutive days, ending its 71-day inflow streak since it began trading

The other nine Bitcoin ETFs witnessing substantial outflows include Bitwise Bitcoin ETF (IBIT), Ark 21Shares Bitcoin ETF (ARKB), Invesco Galaxy Bitcoin ETF (BTCO), Franklin Bitcoin ETF (EZBC), Valkyrie Bitcoin Fund (BRRR), VanEck Bitcoin Trust (HODL), and WisdomTree Bitcoin Fund (BTCW).

Hashdex Bitcoin ETF (DEFI) was the only Spot Bitcoin ETF with zero flows, while Invesco and Galaxy’s Bitcoin ETF experienced the lowest outflows of about $5.4 million. 

This mass exodus observed in Spot Bitcoin ETFs could suggest a potential shift in investor sentiment, especially in the wake of the FED’s announcement. However, Bloomberg ETF analyst, James Seyffart reassures that inflows and outflows were a normal occurrence in an ETF.

BTC Price Crashes

The Bitcoin market is crashing as the price of the cryptocurrency has witnessed crippling declines over the past month. Despite surging to new all-time highs of more than $73,000 in March 2024, BTC witnessed a massive price correction following the highly anticipated Halving Event on April 20.

At the time of writing, Bitcoin’s price is trading significantly below the $60,000 support level at $57,632, according to CoinMarketCap. Earlier on April 30, the cryptocurrency was trading slightly above $59,000, however in a matter of days, it underwent a sharp decline, marking a significant 3.42% drop in the past 24 hours. 

The cryptocurrency has also recorded weekly declines, experiencing a 10.42% drop in its overall price. Crypto analyst, Ali Martinez has suggested that it may be time to buy the dip, as Bitcoin’s 30-day Market Value to Realized Value (MVRV) is currently down by 11.6%.

BTC price recovers from dips | Source: BTCUSD on Tradingview.com

Featured image from U.Today, chart from Tradingview.com

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