Bitcoin ETFs Witness Significant Outflows Amid Crypto Market Turbulence
This week has seen a significant amount of turbulence in the Bitcoin Exchange-Traded Funds (ETFs) market, with total net outflows reaching nearly $900 million. The main contributor to these outflows has been the Grayscale Bitcoin ETF (GBTC), which has experienced staggering outflows totaling $14 billion since its launch in January 2024.
Spot Bitcoin ETFs Record Outflows Throughout the Week
The Bitcoin ETFs have recorded over $888 million in outflows this week. On Friday, March 22, there was a substantial net outflow of $51.6 million, while GBTC alone saw a single-day outflow of $169 million. However, BlackRock’s ETF (IBIT) observed minimal net inflows, which helped to offset some of the negative impact.
Despite the pressure on Bitcoin’s price, which is currently trading at $64,051 with a market cap of $1.259 trillion, analyst Michael van de Poppe sees BlackRock’s consistent inflows into Spot Bitcoin ETFs as a positive sign of ongoing institutional buying activity. This suggests that the market cycle is far from over.
GBTC continues to experience persistent outflows, with Thursday, March 21, marking another substantial outflow of $359 million, bringing the total for the week to $1.8 billion. Additionally, ETF outflows accelerated on March 21 and March 20, reaching $95 million and $261 million respectively, totaling $742 million over three days.
While GBTC saw a notable single-day outflow of $386 million on Wednesday, March 20, IBIT experienced a significant inflow of $49.28 million, bringing its total historical net inflow to $13.09 billion. However, concerns over central bank actions have led to a drying up of ETF inflows this week.
Bitcoin ETFs have experienced consecutive days of outflows, totaling $326 million on Tuesday, March 19. This shift in market sentiment may be due to institutional investors exercising caution ahead of the Federal Open Market Committee (FOMC) decision on March 20, which is reflected in subdued inflows across most ETFs.
GBTC’s troubles persisted with a massive $444 million outflow on Tuesday, exacerbating its losses. On the other hand, BlackRock’s Bitcoin ETF regained momentum on Monday, March 18, recording inflows of $451.5 million, in contrast to minimal inflows for other ETFs.
BTC Price Volatility
Bitcoin recently experienced a major pullback after reaching a new all-time high of $73,836 earlier this month. The price of BTC dropped below $61,000 and then rebounded above $67,000 amid increased volatility. However, it has since plunged back down to the $65,000 level despite the rebound.
At press time, the price of Bitcoin was up by 2.68% to $65,302.84 on Friday, March 23. The oldest cryptocurrency currently has a market capitalization of $1.28 trillion. However, the 24-hour trade volume has plummeted by 33.58% to $27.82 billion.
The recent recovery in Bitcoin’s value has resulted in a short squeeze. According to Coinglass, nearly $30.68 million worth of short liquidations were noted for BTC out of a total of $48.31 million in liquidations. These short traders are expected to buy back their positions to mitigate potential losses, which could temporarily drive the Bitcoin price higher before a significant correction occurs.
The entire crypto market has also experienced a crash, with the price of Ethereum (ETH) falling below $3,200 from its recent high of $4,092. Additionally, Solana (SOL) has dropped below $180 after surging past $200 earlier this month.
Hot Take: Bitcoin ETFs Face Outflows Amid Market Volatility
The Bitcoin ETF market has witnessed significant outflows this week, with the Grayscale Bitcoin ETF (GBTC) being the main contributor. Despite the current turbulence in the crypto market and concerns over central bank actions, BlackRock’s ETF (IBIT) has seen consistent inflows into Spot Bitcoin ETFs, indicating ongoing institutional buying activity. This suggests that the market cycle is far from over.
However, the persistent outflows from GBTC and consecutive days of outflows for Bitcoin ETFs reflect a shift in market sentiment. Institutional investors have been cautious ahead of the Federal Open Market Committee (FOMC) decision, leading to subdued inflows across most ETFs.
As for the BTC price, it has experienced volatility and a major pullback after reaching a new all-time high. The recent recovery in Bitcoin’s value has triggered a short squeeze, with short traders expected to buy back their positions. The crypto market as a whole has also suffered a crash, with Ethereum and Solana both experiencing significant drops in price.
By
By
By
By
By
By