The past week was nothing short of challenging for Spot Bitcoin ETFs, as they struggled to attract significant inflows on a daily basis. This lack of interest resulted in consecutive daily outflows throughout the week, signaling a potential decline in bullish sentiment among institutional traders. The impact of this can be seen in the price of Bitcoin, which dropped to as low as $61,370 during the same period.
During the month of February and early March, investor interest in Spot Bitcoin ETFs surged alongside Bitcoin’s bullish market trend. This frenzy pushed Bitcoin to reach an all-time high of $73,737 and saw these ETFs break trading records in the US. However, the current scenario paints a different picture, with a negative record of five straight days of outflows surpassing a previous four-day streak set in January.
Grayscale’s GBTC, a major player in the cryptocurrency market, also experienced a significant outflow, marking a new record for the most daily outflow. BitMEX Research data reveals that the asset manager witnessed redemptions of 9,539.7 BTC amounting to over $642.5 million in a single day. This historic outflow has raised concerns about the overall health of the crypto market.
The surprising element in this situation is the weak inflow into other Spot ETFs like BlackRock (IBIT) and Fidelity (FBTC), which previously offset outflows from GBTC. BlackRock (IBIT) recorded a record low inflow of $18.9 million, while Fidelity saw its inflow plummet to $5.9 million. This shift in investor behavior indicates a lack of confidence in the market.
As of now, Bitcoin is trading at $65,122, struggling to regain its momentum after the recent price drop. The looming question is whether Bitcoin can recover and surpass its previous all-time high. Continued outflows from Spot Bitcoin ETFs could further dampen Bitcoin’s price recovery prospects in the near future.
Interestingly, the weak inflows into Spot ETFs do not align with the overall trading activity, as trading volumes remained substantial throughout the week. The cumulative trading volume of the top 10 ETFs has now reached $164 billion, with $22.71 billion traded just last week. This data suggests that there is still significant market activity despite the outflow trend.
Despite the challenging week, there is still hope for Bitcoin to rebound and potentially surpass the $73,000 mark, especially with the upcoming Bitcoin halving event. The next few days will be crucial in determining the direction of Bitcoin’s price movement. Investors should remain cautious and conduct thorough research before making any investment decisions in such a volatile market.