The recent price action of Bitcoin has left institutional investors with a bearish sentiment, leading to a wave of massive outflows from Bitcoin investment products. Data revealed by CoinShares in a blog post indicated that Bitcoin investment funds experienced an outflow of $284 million last week. The majority of these outflows were attributed to the US Spot Bitcoin ETFs, which saw a total outflow of $156 million. This significant amount of outflows is particularly concerning as it is the first time these funds have experienced such substantial withdrawals.
CoinShares suggested that the magnitude of outflows from Bitcoin investment products may have been triggered by Bitcoin’s decline below $62,000. This price level is estimated to be the average purchase price of these ETFs since their launch. The drop in Bitcoin’s price likely led to automatic sell orders being triggered, causing further downward pressure on the cryptocurrency.
Mixed Feelings amongst Institutional Investors
Institutional investors have exhibited mixed feelings towards Bitcoin investment funds due to the cryptocurrency’s recent price action. The drop in Bitcoin’s price below $60,000 seemingly prompted panic selling among institutional investors, causing them to liquidate their positions rather than hold onto them in the hopes of a recovery.
Despite the negative sentiment surrounding Bitcoin investment products in the US, CoinShares noted a positive development in Hong Kong. The Spot Bitcoin and Ethereum ETFs launched in Hong Kong last week saw a total of $307 million in inflows during their first week of trading. This influx of funds into the new ETFs could potentially act as a catalyst for Bitcoin’s price to continue on an upward trend.
Interestingly, while Bitcoin experienced outflows from investment products, Ethereum broke its seven-week streak of outflows with $30 million flowing into Ethereum investment products. Other altcoins such as Avalanche, Cardano, and Polkadot also observed inflows during this period. This divergence in trends among different crypto assets highlights the varying sentiments and preferences of institutional investors in the market.
The ongoing outflows from Bitcoin investment products have continued to exert downward pressure on Bitcoin’s price. Despite hopes that net inflows into Grayscale’s GBTC could signal a turnaround, the US Spot Bitcoin ETFs recorded a net outflow of $15.7 million on May 7. GBTC was primarily responsible for the outflows, with a net outflow of $28.6 million from the fund. This persistent selling pressure has contributed to Bitcoin trading at around $62,300, marking a decrease of over 2% in the last 24 hours according to data from CoinMarketCap.
The bearish sentiment among institutional investors towards Bitcoin investment products has resulted in significant outflows, negatively impacting the price of the flagship cryptocurrency. It remains crucial for investors to conduct thorough research and analysis before making any investment decisions, as the cryptocurrency market continues to exhibit volatility and uncertainty.