Key Points
- Bitcoin ETFs see highest daily net outflows, reflecting bearish sentiment, as Bitcoin’s price drops.
- Grayscale Bitcoin Trust records the largest capital exit amidst the bearish market.
Bitcoin Exchange Traded Funds (ETFs) are experiencing significant net outflows, indicating a change in market sentiment towards a more bearish outlook. This trend coincides with Bitcoin’s price falling into the lower spectrum of the $60,000 territory.
Bitcoin ETFs Experience Outflows
Farside Investors, a U.K.-based investment management firm, has reported that Bitcoin ETF products saw net outflows amounting to $326.2 million on March 19. This marks the second consecutive day of such outflows.
This figure was reported just a week after ETFs recorded record inflows exceeding $1 billion on March 12. These investment products had been seeing consistent inflows for 10 consecutive days until March 18, when they recorded capital outflows totaling $154.3 million.
Bitcoin’s Price Downturn
Bitcoin has been steadily losing the gains made during the recent market surge to $73,000. After reaching an all-time high of $73,750 on March 14, the cryptocurrency has seen continual declines, marking a decrease of over 11% in the last week. This downward trend has intensified the decline in bullish pressure.
The latest ETF outflow of $326 million is the largest daily net flow out of the Bitcoin ETFs, significantly exceeding the previous record of $158.4 million on Jan. 24. The majority of these outflows were recorded by the Grayscale Bitcoin Trust (GBTC), which saw $443 million in capital exit.
Interestingly, the bearish outcome on March 19 did not result from increased outflows from these investment products, but rather from decreased inflows. All products, excluding those from BlackRock, Fidelity Investments, and Bitwise, recorded a net flow of $0.
While the ETFs were unable to acquire more Bitcoin, investors did not significantly withdraw their funds. BlackRock’s IBIT, Fidelity Investments’ FBTC and Bitwise’s BITB saw a combined inflow of $117.3 million, but this figure was insufficient to counterbalance the $443 million outflow solely recorded by Grayscale’s ETF.
Markus Thielen, founder of 10x Research, had predicted this bearish turn. Thielen suggested that the Bitcoin ETF market could see a drop in capital inflows as Bitcoin corrects the gains of the latest market uptrend.
