A net $564 million was withdrawn from spot Bitcoin ETFs in the U.S. on May 1, marking their worst day since launch.
Decreasing interest in spot Bitcoin ETFs
On May 1, spot Bitcoin ETFs saw a total outflow of $563.7 million. According to SosoValue data, this is the largest outflow recorded since their launch in January 2024.
Fidelity’s FBTC ETF recorded the largest net outflows among the various Bitcoin spot ETFs, with over $191 million withdrawn from the fund. This amount even exceeds the $167.3 million outflow of Grayscale’s GBTC.
ARK Invest’s Bitcoin Spot ETF (ARKB) saw an outflow of $98.1 million, making it the 3rd largest net outflow of the day, followed by BlackRock’s IBIT ($36.9 million) and Bitwise’s BITB ($29 million). This is also the first time that BlackRock’s Bitcoin Spot ETF has recorded a net outflow.
Thus, with the exception of the Hashdex ETF (DEFI), all U.S. Bitcoin spot ETFs recorded net outflows this Wednesday, June 1, 2024.
Daily net inflows and outflows on spot Bitcoin ETFs
Enthusiasm for spot Bitcoin ETFs seems to have faded, at least temporarily. Monthly outflows for April reached $343.5 million, ending a 3-month run of positive net inflows.
Grayscale’s GBTC ETF led the way in April outflows, with $2.5 billion.
BlackRock: first outflow recorded on iShares Bitcoin Trust
BlackRock’s iShares Bitcoin Trust, the fastest-growing Bitcoin spot ETF in the U.S., experienced a net outflow of $37 million on Wednesday, marking its first net outflow since its launch in January.
This withdrawal is part of a broader trend of disinvestment in spot Bitcoin ETFs, and can be explained by several cyclical factors.
On the one hand, the prospect of interest rates being kept high for longer by the US Federal Reserve (FED) is weighing on risk assets. Indeed, the rising cost of money is reducing the attractiveness of speculative investments and driving investors towards more stable assets.
On the other hand, Bitcoin’s inherent volatility has led to a widening of discounts on the net asset value of certain US portfolios. These discounts, which reflect the gap between the ETF price and the actual value of the underlying Bitcoins, are deterring some potential investors who fear they are not buying Bitcoin at its fair price.
Note that this withdrawal does not necessarily mean a reversal in the underlying trend for Bitcoin and the ETFs backed by it. In fact, it’s worth noting that this bad day for spot Bitcoin ETFs aligns with a significant drop in the BTC price.
The future of spot Bitcoin ETFs will surely depend on the evolution of the cryptocurrency market as a whole. If Bitcoin manages to overcome its current challenges, the ETFs backed by it could see significant growth in the years to come.
Currently, BlackRock’s iShares Bitcoin Trust retains a net invested amount of over $6 billion.
