The price of Bitcoin continues on a downward trajectory, with a decline of approximately 5% in the last 24 hours. At its lowest point today, Bitcoin was valued at less than $62,500, resulting in a reduction in market capitalization of nearly $90 billion at its most severe. This precipitous drop follows the price explosion of the previous week and appears to be influenced by weak developments in the spot Bitcoin ETFs.
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Farside Investors’ calculations indicate a net outflow from the spot ETFs of $154.3 million on Monday, a phenomenon not observed since March 1. Also, there was a decaying net inflow into the listed funds on both Thursday and Friday. As previously discussed, the average ETF flow from March 1st through last Wednesday was positive, averaging $481.4 million. This suggests a substantial overall buying pressure for Bitcoin and the larger the capital inflow these ETFs experience, the greater the demand for Bitcoin.
Grayscale’s spot ETF experienced its largest outflow since its conversion from a trust to an ETF yesterday, setting a record. The net outflows from their ETF concluded at $642.5 million. Historically, other listed funds have compensated for the outflows from GBTC, but with the inflows to the other ETFs yesterday amounting to $488.2 million, the overall result was a net outflow. Consequently, the listed funds, when considered collectively, had a negative impact on the Bitcoin price.
The listed Bitcoin funds that have been leading the charge thus far are Blackrock’s IBIT and Fidelity’s FBTC. While IBIT performed robustly yesterday with an inflow of $451.5 million, Fidelity only managed to attract $5.9 million, marking their lowest inflow to date. It’s worth noting that we highlighted Fidelity’s analysis of Bitcoin in our post titled “Why You Should Consider Buying Bitcoin This Christmas”.
The consensus among most observers is that the outflow from GBTC will persist. The question that arises is whether the other ETFs, spearheaded by BlackRock and Fidelity, will be able to withstand this trend.
This text is intended to inform and is not an investment recommendation.
Best regards,
Adam Jakobsen.
NBX.
