The world of Bitcoin exchange-traded funds (ETFs) has witnessed a notable shift, with $76 million in net outflows recorded on their seventh day of trading. This development was highlighted in a recent analysis by Bloomberg ETF analyst James Seyffart.
On January 23, Seyffart shared on X (formerly Twitter) that it was a “bad day” for Bitcoin ETFs, particularly pointing out Grayscale’s significant net outflows. Grayscale experienced its largest outflow yet from the GBTC (Grayscale Bitcoin Trust), amounting to $640 million on that day alone, contributing to a total of $3.45 billion in outflows.
Despite these outflows, Seyffart noted in a conversation with Cointelegraph that the overall inflows into spot Bitcoin ETFs remained positive. BlackRock, for instance, had its third-largest day of positive flows, netting $272 million in inflows. Overall, the net inflow into spot Bitcoin ETFs stands at over $1.1 billion, even after accounting for the GBTC outflows.
While the outflows from GBTC are significant, Seyffart anticipates that this trend might cool off in the next two weeks. Much of the recent selling pressure on Grayscale’s GBTC fund is attributed to the FTX estate liquidating its holdings.
According to a report from January 22, the FTX estate had sold about two-thirds of its 22.8 million GBTC shares by that date. This sale is estimated to represent around $600 million of the total $3.4 billion in GBTC-related net outflows.
Since the approval of 10 spot Bitcoin ETFs on January 10, the price of Bitcoin has seen a significant drop, falling from a high of $49,100 to as low as $39,500 on January 23. At the time of the report, Bitcoin was stabilizing just above the $40,000 mark.
This price decline coincides with a sharp decrease in open interest on Bitcoin futures on the Chicago Mercantile Exchange (CME). This suggests a reduced enthusiasm among institutional investors for leveraged exposure to Bitcoin. Open interest on the CME dropped from a near-record high of $6.4 billion on January 12 to $4.4 billion.
These developments in the Bitcoin ETF space and the broader cryptocurrency market reflect shifting investor sentiments and market dynamics. The outflows from GBTC and the decline in Bitcoin’s price and futures open interest indicate a cautious or bearish outlook among some investors, while the inflows into other spot Bitcoin ETFs like BlackRock’s suggest continued interest in cryptocurrency investments. The situation remains fluid, with various factors influencing market behavior.
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