Bitcoin Spot ETFs See Net Outflows After 19 Consecutive Days of Inflows

Ruholamin Haqshanas

Last updated:

June 11, 2024 03:05 EDT | 2 min read

Bitcoin spot exchange-traded funds (ETFs) have experienced their first net outflows in nearly a month.

According to Farside Investors, a total of 11 U.S. spot Bitcoin ETFs collectively witnessed a net outflow of $64.9 million, which comes after a remarkable streak of 19 consecutive days of net inflows.

Among the Bitcoin spot ETFs, the Grayscale Bitcoin Trust (GBTC) stood out with the largest net outflow of $39.5 million.

Following closely behind was the Invesco Galaxy Bitcoin ETF (BTCO) with $20.5 million in net outflows.

The Fidelity Wise Origin Bitcoin Fund (FBTC) also experienced a minor outflow of $3 million.

On the other hand, Bitwise and BlackRock’s ETFs saw modest inflows of $7.6 million and $6.3 million, respectively.

Bitcoin Price Drops After ETF Outflows

The outflows from the ETFs coincided with a decline in the price of Bitcoin.

Over the past 12 hours, Bitcoin’s value dropped from just above $70,000 to below $68,000, resulting in $170 million in liquidations and exerting downward pressure on the entire cryptocurrency market.

On June 10, the total net outflow of Bitcoin spot ETFs was $64.9318 million, the first net outflow after 19 consecutive days of net inflows. Grayscale ETF GBTC had a single-day outflow of $39.5366 million, Bitwise ETF BITB had a inflow of $7.5910 million, and BlackRock ETF IBIT…

— Wu Blockchain (@WuBlockchain) June 11, 2024

In the preceding week, BTC spot ETFs had consistently observed strong inflows, with net inflows recorded on each trading day.

The total net inflow for the week amounted to approximately $1.83 billion, reaching levels of demand not seen since early March, Matteo Greco, a research analyst at digital asset investment firm Fineqia International, said in a recent note.

The cumulative net inflow since the inception of these ETFs has now reached a record high of about $15.7 billion.

The integration of Bitcoin into traditional finance is expanding globally.

Following the launch of Australia’s first BTC spot ETF, the Thailand Securities and Exchange Commission (SEC) recently approved One Asset Management to introduce Thailand’s inaugural BTC spot ETF.

Central Banks Cut Rate

On the macroeconomic front, both the Bank of Canada (BOC) and the European Central Bank (ECB) have cut interest rates by 25 basis points.

Despite inflation levels surpassing the central banks’ 2% annual target, these rate cuts indicate governments’ optimistic expectations about their ability to manage inflation while implementing less restrictive monetary policies.

Less restrictive monetary policies are generally favorable for risk-on assets, including stocks and digital assets like Bitcoin, particularly when rate cuts do not signal an imminent recession.

In this case, the central banks’ decision to reduce rates despite higher-than-target inflation suggests confidence in their ability to control and maintain inflation near desired levels, even with more expansionary monetary policies.

Meanwhile, the U.S. Bureau of Labor Statistics is set to release May figures for its inflation-measuring Consumer Price Index (CPI) on June 11.

Analysts have forecast inflation to rise 0.1% after a 0.5% bump in April, bringing the year-on-year figure to 3.4% with core inflation forecast to rise 0.3% in May, the same as April, Morningstar reported.

The Fed’s monetary policy is also to be decided at a two-day Federal Open Market Committee (FOMC) meeting starting the same day.