Spot Bitcoin ETF Demand Slows Down in the US
Spot Bitcoin ETFs are derivative products allowing investors, especially regulated institutions and whales, to gain exposure to the most valuable cryptocurrency without the hassle of custody. Major spot ETF issuers such as Bitwise and Proshares use regulated custodians to secure all BTC backing the minted shares in circulation.
However, recent data indicates that demand for spot Bitcoin ETFs in the United States has been decreasing over the past month. Most US-based spot Bitcoin funds, except for iShares Bitcoin Trust (IBIT) by BlackRock, have seen zero inflows in the last two days.
- IBIT registered $73.4 million on April 15, a 30% drop from the previous day.
- All other ETFs, excluding GBTC, recorded no inflows over the same period.
On April 15, data from Lookonchain revealed that GBTC experienced $115 million in outflows, while the nine spot Bitcoin ETFs collectively decreased by approximately $25 million.
BTC Faces Significant Selling Pressure
The decrease in inflows into spot Bitcoin ETFs can be linked to challenging market conditions. Currently, sellers are dominating the market, with BTC down 14% from its all-time highs based on the BTCUSDT daily chart.
Despite prices being within a wide range, with support at $61,000 and resistance at $73,800, sellers have the upper hand in the short term. The price remains constrained within the bear bar of April 13, signaling a favorable trend for sellers.
If BTC prices drop below $60,000, there is a possibility of outflows in spot Bitcoin ETFs due to last week’s price action. In such a scenario, the cryptocurrency could decline to levels as low as $53,000 or even $50,000.
Although Hong Kong regulators approved multiple spot Bitcoin and Ethereum ETFs on April 15, the impact on the market is yet to be determined. Ethereum, similar to Bitcoin, is under pressure and is heading towards critical support levels.
Hot Take: Stay Alert Amidst Stagnating Demand
Despite active on-chain accumulation, demand for Bitcoin exchange-traded funds (ETFs) in the United States has shown signs of stagnation over the past four weeks. This trend is evident even when excluding ETF settlement transactions. As the market faces selling pressure and uncertain market conditions, investors should closely monitor the situation to make informed decisions about their crypto investments.
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