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Tuesday, May 21, 2024

Spot Bitcoin ETFs See Fourth Straight Day of Outflows

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On March 21, there was a net outflow of $94 million from the ten newly launched spot Bitcoin ETFs.

Although the figure is lower than the previous three days, it represents another day when funds have been pulled out of the institutional investment products.

Fund outflows for March 18th, 19th, and 20th totaled $154 million, $326 million, and $261 million, respectively, according to Farside Investors. The net total outflow for this week is currently $836 million, with Friday’s figures yet to be included.

This suggests that the past two months of Bitcoin ETF hype have come to a temporary halt as investors take profits.

ETF Funds Flowing Out

Grayscale, which has been hemorrhaging BTC all month, saw a further outflow of $359 million on March 21.

“GBTC has now lost 42.3% of its shares since converting to an ETF,” commented industry analyst James Seyffart.

GBTC currently holds 355,759 BTC, having lost 264,214 BTC since the conversion. The total outflow from Grayscale so far this week is a whopping $1.83 billion.

Fellow ETF analyst Eric Balchunas commented:

“What a pounding. Thought worst was over. Guess not. Who is leaving now that wasn’t motivated to leave past two months?”

Balchunas observed that the uptick in outflows from Grayscales was likely “related to the bankruptcies because of the size and consistency.”

He added that Gemini/Genisis outflows were likely buying BTC with cash; hence, the market was holding up.

In February, a bankruptcy judge permitted Genesis to liquidate roughly $1.3 billion worth of GBTC shares as part of its efforts to reimburse investors.

Balchunas said that the worst is probably close to being over before adding, “once it is, only retail will be left, and flows should look more like the Feb trickle.”

BlackRock Inflows Slowing

BlackRock, which recently announced a new tokenized RWA fund, prevented Thursday’s outflow from being three figures like the three days before it. IBIT had an inflow of $233.4 million for the day.

The fund’s total inflows for the week were $809 million. BlackRock had two very slow days on Tuesday and Wednesday as BTC prices plunged.

The other seven funds had minimal inflows for March 21, with the Invesco Galaxy Bitcoin ETF (BTCO) seeing a $10 million outflow.

Crypto markets had retreated 1.5% on the day, with total capitalization falling to $2.63 trillion at the time of writing.

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