Bitcoin Spot ETFs See Net Outflow on Third Consecutive Day

Bitcoin spot exchange-traded funds (ETFs) in the United States have witnessed a three-day streak of net outflows, with a total of $261.5 million leaving the ten approved funds on March 20. 

This brings the cumulative net outflows over the three days to $742 million, as data from Farside Investors indicates. 

On March 18 and 19, net outflows amounted to $154.3 million and $326.2 million, respectively.

According to SoSoValue data, on March 20, the total net outflow of Bitcoin spot ETFs was $261 million, marking three consecutive days of net outflows.

The ETF GBTC had a single-day net outflow of $386 million, with GBTC’s total historical net outflow reaching $13.27 billion.… pic.twitter.com/8yAN4N917x

— Wu Blockchain (@WuBlockchain) March 21, 2024

GBTC Outflows Persist

The main contributor to the outflows was the Grayscale Bitcoin Trust (GBTC), which experienced an outflow of $386.6 million. 

The Invesco Galaxy Bitcoin ETF (BTCO) also saw $10.2 million exit the fund. These outflows overshadowed the minimal inflows from the other eight approved ETFs.

The BlackRock iShares Bitcoin Trust (IBIT) had its second-lowest net inflow day at $49.3 million, just $4 million higher than its daily low on February 6. 

Similarly, the Fidelity Wise Origin Bitcoin Fund (FBTC) had a relatively low inflow day at $12.9 million.

This marks the second-highest net outflow day for the ten ETFs, with the highest being the $326.2 million outflow on March 19.

In contrast, Bitcoin experienced a gain of over 3% during U.S. trading hours and has seen a 7.5% increase over the past 24 hours, reaching a trading price of $66,838.

Over the previous week, BTC has declined from its record high on March 14 as the countdown to the blockchain’s halving, where mining rewards are halved, enters its final month. 

Historical data from CoinMarketCap shows that Bitcoin typically experiences a fall leading up to the halving, and this pattern seems to be repeating as the event approaches its final 30 days.

Outlook for Bitcoin Remains Optimistic

Despite the current downturn, the outlook for Bitcoin remains optimistic among many investors and market analysts. 

The approval of spot Bitcoin ETFs in January has sparked a new wave of investor interest in cryptocurrencies.

This is evident from record weekly inflows into digital asset investment products, totaling $2.9 billion last week. This influx has pushed the year-to-date inflows to an impressive $13.2 billion, according to CoinShares data.

Moreover, the upcoming Bitcoin halving event next month is anticipated to further bolster the cryptocurrency’s value. 

This event will halve the number of new tokens released, effectively tightening the supply amidst rising demand.

Meanwhile, Grayscale plans to gradually reduce fees on its flagship product as outflows soar to $12 billion. 

According to Grayscale CEO Michael Sonnenshein, the cryptocurrency fund manager anticipates fee reductions for the Grayscale Bitcoin Trust ETF in the coming months as the crypto ETF market matures.

Grayscale had previously defended its higher-than-average charges, explaining that fees tend to be higher for new products in their initial stages. 

Since its conversion into an ETF in early January, GBTC has experienced outflows exceeding $12 billion. 

Sonnenshein acknowledged that outflows were expected as investors sought to capitalize on profits, arbitragers exited the fund, and individuals unwound positions tied to bankruptcies and forced liquidations.