Last week proved to be challenging for Spot Bitcoin ETFs as they struggled to attract significant inflows day after day. The result was consecutive daily outflows throughout the week, indicating a potential decrease in bullish sentiment among institutional traders. This decline in investor interest was reflected in the price of Bitcoin, which dropped to as low as $61,370 during the same week.
Investor interest in Spot Bitcoin ETFs had surged in February and early March amidst Bitcoin’s bull run, propelling its price to an all-time high of $73,737. However, this high level of interest led to the ETFs setting new trading records for exchange-traded funds in the US. Unfortunately, they have also now set a negative record of five consecutive days of outflows, surpassing a previous four-day outflow streak set in January. Data from BitMEX Research indicated that these ETFs experienced outflows of $154.4 million, $326.2 million, $261.6 million, $93.1 million, and $51.6 million over the five days. Additionally, Grayscale’s GBTC set a new record for the most daily outflow, with withdrawals of 9,539.7 BTC valued at over $642.5 million on one particular day.
The outflow from Grayscale was not unexpected, as the fund had seen consistent daily outflow since its inception. However, the surprise came from the weak inflow into other Spot ETFs like BlackRock (IBIT) and Fidelity (FBTC), which had historically balanced outflows from GBTC. BlackRock (IBIT) experienced a record low inflow of $18.9 million, while Fidelity saw its inflow drop to $5.9 million on specific days. Bitcoin is currently trading at $65,122.
The critical question now is whether Bitcoin can make a significant recovery and regain its recent all-time high above $73,000. Continued outflows from Spot Bitcoin ETFs could potentially exert more downward pressure on the price of Bitcoin. Despite the weak inflows, trading volume remained substantial throughout the week, reaching a cumulative trading volume of $164 billion with $22.71 billion traded last week. The upcoming days will be pivotal in determining Bitcoin’s next major price movement. Even after a challenging week, there is still a possibility for Bitcoin to bounce back to $73,000 or higher, especially with the upcoming Bitcoin halving event on the horizon.
The recent struggles faced by Spot Bitcoin ETFs highlight the fragile nature of investor sentiment and the impact it can have on the cryptocurrency market. While the price of Bitcoin has experienced fluctuations, there remains a glimmer of hope for a potential recovery in the near future. It is essential for investors to conduct thorough research and assess the risks involved before making any investment decisions in the volatile cryptocurrency market.