Spot Bitcoin ETFs Witness Persistent Negative Outflows, A Sign Of Fading Confidence?

Mila October 11, 2024

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This week has turned out to be a pessimistic one for the Spot Bitcoin Exchange-Traded Funds (ETFs) as the historic products have experienced consistent negative outflows in the past few days in light of recent price swings.

Bitcoin Spot ETFs Record Outflows 3 Days In A Row

In a worrying development, the Spot Bitcoin ETFs have witnessed another day of negative outflow, recording losses worth millions of dollars following Thursday’s trading day, suggesting a decline in adoption at both the retail and institutional level.

Data from London-based investment management firm, Farside Investors shows that the outflow marks 3 consecutive days of investor withdrawals. According to reports from the firm, the products suffered a cumulative outflow of over $81.1 million on Thursday after experiencing withdrawals worth $30.6 million and $18.6 million on Wednesday and Tuesday respectively.

Fidelity BTC ETF (FBTC) recorded the most daily outflow, valued at $33.8 million followed by Ark Invest BTC ETF (ARKB), Blackrock’s BTC ETF (IBIT), and Bitwise BTC ETF (BITB), which sustained losses of about $30.3 million, $10.8 million, and $6.2 million respectively. Meanwhile, the rest of the funds saw zero or no inflows.

The consistent withdrawals show the increasing unpredictability of the cryptocurrency market as investors reduce their exposure to Bitcoin in the face of increased volatility and macroeconomic worries. It also demonstrates waning confidence among investors in the short-term potential of BTC in spite of strong optimism after the funds were launched earlier this year.

It is worth noting that the withdrawals came after the funds recorded a massive net inflow of over $235.2 million on Monday, which might be attributed to a general market rebound. However, since the price of BTC fell on Tuesday, the exchange funds have been incurring significant outflows, indicating a cautious approach among investors.

This negative trend is observed in the broader landscape of spot ETFs as Ethereum spot ETFs have also been recording substantial outflows alongside Bitcoin.

BTC Whales Continues To Stack The Asset

Even though the spot BTC ETFs have persistently recorded huge losses in the past few days, reports revealed that whales are still accumulating the crypto asset, signaling strong confidence about an impending bullish move. The ongoing trend suggests that large holders have been acquiring BTC with the aim of capitalizing on the long-term growth of the coin.

Negentropic, a crypto expert and trader shared the development on the X (formerly Twitter) platform. According to the expert, despite the unexpected increase in the data on United States inflation, the whales are still eager to acquire BTC.

He also noted that both long-term holders and whales keep amassing BTC, and short-term holders are beginning to see recovery as exchange volumes decline. As a result, Negentropic claims that the “confidence in Bitcoin’s mid- and long-term performance is solid.”