The initial excitement surrounding Bitcoin exchange-traded funds (ETFs) appears to be cooling down with a significant slowdown in investments by institutional players. This shifting comes at a time when Grayscale, the largest crypto asset manager globally, has recorded its highest outflows.
According to James Seyffart, a well-known ETF analyst, Grayscale’s Bitcoin trust GBTC experienced a huge outflow worth an enormous $643 million in a single day on March 18th. This exceeded the previous record of $640 million set in January 2024. According to BitMEX Research, that means about 9600 BTC have left Grayscale alone.
Grayscale has a challenging time at the moment, but other players in the Bitcoin ETF market are also seeing similar outflows. Fidelity’s FBTC fund, launched in January, witnessed its lowest daily inflow on March 18th, receiving only $5.9 million. Another popular Bitcoin ETF, IBIT from BlackRock, has also been trending downwards for the past few days with respect to inflows.
Bitcoin ETFs have seen a major decline in net inflows due to this collective slowdown. For the last two days, total flows are now below 200 million dollars compared to the record-breaking flow of 1 billion on March 12th.
Bitcoin ETFs Maintain Stability Despite Minor Outflows
Even though there has been a small flow of funds from these Exchange-Traded Funds, Bitcoin ETFs continue to show significant accumulation, pointing out the existing bullish sentiment within institutional investors. As of 19th March 2024, the Bitcoin ETFs have added a total of 7,300 BTC to their holdings, which is an all-time high, indicating unrelenting faith in the world’s largest digital asset.
Thomas Fahrer, a well-known cryptocurrency analyst, in his tweet identifies a tiny net outflow of 2,300 BTC from Bitcoin ETFs. However, he mentions the start of nine new Bitcoin ETFs, which independently brought in around 7,300 BTC, thereby surpassing the withdrawal rate. As such this positive flow continued to cause the total amount of Bitcoins held by exchange-traded funds to be an astonishing 833,800 BTC.
BlackRock, which is also known as the world’s biggest money manager, is one of the most prominent buyers in this sense having acquired 6700 BTC. This shows the increasing acceptance of BTC as an institutional asset by BlackRock through its recent massive purchase.
Grayscale’s BTC Investment Trust (GBTC), the world’s oldest and biggest BTC ETF, on the other hand, saw a minor outflow of 9,600 BTC that accounted for the net outflows revealed above. It’s important to note, though, that GBTC outflows are often due to short-term investment strategies and should not be mistaken as a change in longer-term sentiment.
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