Bitcoin ETFs Experience First Daily Outflows as Negative Streak Continues

April 19, 2024

Bitcoin ETFs have witnessed their first daily outflows, marking a shift in investors’ sentiment toward the digital asset. The Bitwise Bitcoin ETF (BITB) registered net outflows of $7.3 million on Wednesday, the first since its inception on January 11 this year.

The negative streak continued for the fourth consecutive day, with a total of $165 million in net outflows from various spot bitcoin ETFs. This is the longest outflow streak for a month, with the combined U.S. spot bitcoin ETFs registering net outflows totaling $314.8 million in the last four trading days.

Interestingly, BlackRock’s IBIT was the only spot bitcoin ETF to generate inflows on Wednesday, with net inflows of $18.1 million. However, this was a fraction of its historical daily average of around $230 million. The remaining funds, including Grayscale’s converted GBTC fund and Ark Invest’s ARKB, recorded substantial net outflows of $133.1 million and $42.7 million, respectively. The slowdown in overall flows for spot bitcoin ETFs is evident, with net daily inflows peaking at $1.05 billion on March 12, 2024. Since then, bitcoin has dropped 17% from its latest all-time high of $73,836.

Despite the negative streak, the overall picture for Bitcoin ETFs remains strong, with net inflows since their launch totaling $12.27 billion. However, the recent outflows may indicate a shift in investor sentiment towards Bitcoin, which is currently trading at $61,424, down 3% in the last 24 hours and 14% over the past week. The negative sentiment may be attributed to the rapidly approaching fourth halving of Bitcoin, which is set to occur in less than one day or 100 blocks, potentially on April 20. 

While some analysts, such as Bitwise CIO Matt Hougan, view the halving as bullish, others, like Coinify CEO Rikke Staer, suggest it may be a “sell the news” event, potentially overwhelming demand due to less efficient miners selling their existing Bitcoin holdings.

In summary, the first daily outflows for bitcoin ETFs mark a significant shift in investor sentiment towards the digital asset. While the overall picture remains strong, the recent outflows may indicate a more cautious approach from investors as the fourth halving approaches.

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