Key Points
- Spot Bitcoin ETFs experience four consecutive days of outflows, with a combined outflow of $152 million.
- Fidelity’s FBTC and Grayscale’s GBTC are the primary contributors to the outflows.
The previously buoyant spot Bitcoin ETF market is experiencing a downturn. After four days of continuous outflows, Tuesday, June 18th, marked a significant low point. Notably, none of the major spot Bitcoin ETFs recorded any inflows. Instead, they witnessed a combined outflow of $152 million. This trend has raised questions about investor sentiment towards Bitcoin and its exchange-traded fund counterparts.
Major Contributors to the Outflows
Fidelity’s FBTC and Grayscale’s GBTC, the leading spot Bitcoin ETFs in terms of market share, were the primary contributors to the outflows. FBTC saw an outflow of $83 million, while GBTC had $62.3 million leaving the fund. This investor withdrawal trend has resulted in the total assets under management for spot Bitcoin ETFs falling to $14.7 billion, down from its peak earlier this year.
BlackRock and Fidelity hold a significant portion of the spot Bitcoin ETF market, with their combined Bitcoin holdings surpassing those of major corporate player MicroStrategy. However, a more in-depth examination reveals a more nuanced picture of how investors interact with these funds.
According to BlackRock’s Chief Investment Officer, Samara Cohen, nearly 80% of Bitcoin ETF purchases come from individual investors. While hedge funds and brokerages have shown some buying interest, registered investment advisors remain wary. Their hesitations revolve around Bitcoin’s volatility, its relatively short history as an asset class, and regulatory uncertainties.
Impact on Bitcoin Price and Potential Hope from Australia
The recent outflows, primarily due to declining investor interest, have exerted downward pressure on the Bitcoin price. At the time of writing, BTC was trading around the $65,000 mark. This is according to data from CoinMarketCap.
Meanwhile, Australia recently launched its spot Bitcoin ETFs. Notably, these ETFs have defied the trend and have reportedly seen inflows, albeit modest. It may be too early to determine whether the inflows are due to initial excitement or if investors in the region are simply approaching ETFs differently.
In summary, the slowdown in spot Bitcoin ETF inflows, particularly in the United States, signifies a shift in investor sentiment. While the market holds potential, concerns about volatility and regulatory uncertainties remain prevalent.
