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Record Outflows in US Bitcoin ETFs
The spot Bitcoin exchange-traded funds (ETFs) in the United States have witnessed record net outflows, with BlackRock’s iShares Bitcoin Trust (IBIT) experiencing its first-ever day of outflows. On May 1, BlackRock’s Bitcoin fund saw $36.9 million flow out, according to data from Farside Investors.
Outflow Details
- Nine other Bitcoin ETFs collectively recorded outflows of $526.8 million.
- The Hashdex Bitcoin ETF (DEFI) was the only one to report zero flows.
Among the ETFs, the Fidelity Wise Origin Bitcoin Fund (FBTC) experienced the largest outflow for the day, with $191.1 million net outflows. The Grayscale Bitcoin Trust (GBTC) followed closely behind, with an outflow of $167.4 million.
Market Impact
These outflows coincide with a 10.7% decrease in the price of Bitcoin over the past week. Nate Geraci, President of ETF Store, highlighted that the iShares Gold ETF and SPDR Gold ETFs have experienced significant outflows so far this year, despite gold showing a 16% increase year-to-date.
Expert Insights
James Seyffart, an ETF analyst at Bloomberg, emphasized that the Bitcoin ETFs are still operating smoothly overall, with inflows and outflows being a normal occurrence in the life of an ETF.
Bitcoin Performance
Bitcoin has experienced its most challenging month since the collapse of Sam Bankman-Fried’s FTX empire, as the excitement surrounding US spot Bitcoin ETFs continues to wane. The cryptocurrency’s value plummeted by nearly 16% in April, only slightly better than the decline witnessed in November 2022.
The surge in demand fueled by the anticipation of ETFs propelled Bitcoin to an all-time high of almost $74,000 in March. However, as optimism for Federal Reserve interest-rate cuts waned and risky investments lost their allure, inflows to these products significantly decreased.
Market Reactions
The stocks of crypto mining companies suffered more significant declines than Bitcoin itself. Companies like Marathon Digital Holdings Inc., Riot Platforms Inc., Cleanspark Inc., and Cipher Mining Inc. experienced drops ranging from 7.9% to 11%. MicroStrategy Inc., known for its corporate Bitcoin strategy, also faced an 18% tumble after reporting a first-quarter loss of $53 million due to an impairment charge against the value of its Bitcoin holdings.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
