By
Steve Muchoki
June 28th, 2024
Bitcoin’s recent price drop to 3.34% triggers major outflows from leading Bitcoin ETFs, with Grayscale’s GBTC fund losing $90 million.
US Spot Bitcoin Exchange-traded funds (ETFs) are experiencing a wave of investor pessimism, recording a combined net outflow of $174.45 million on Monday, June 24th, 2024, according to the SoSoValue. The outflow follows the seventh consecutive day of negative trend for these investment vehicles, indicating a growing lack of confidence in the short-term prospects of the world’s leading cryptocurrency.
Photo: SoSoValue
Grayscale Fund Leads Outflow Movement
Grayscale‘s industry-leading GBTC fund led the outflow movement, losing a significant $90 million. Fidelity‘s FBTC wasn’t far behind, with $35 million in net outflows recorded the same day. This trend extended to other major players. Franklin Templeton’s EZBC experienced its first net outflow since May 2nd, amounting to $20.8 million.
VanEck’s HODL saw $10 million leave its coffers. Bitwise’s BITB and Ark Invest/21Shares’ ARKB fund witnessed outflows of $8 million and $7 million, respectively. Even Invesco and Galaxy Digital’s BTCO couldn’t escape the downward spiral, reporting net outflows of $2 million.
Interestingly, BlackRock‘s IBIT, the leading Spot Bitcoin ETF by net asset value, managed to break even on Monday, June 25, recording zero net flows. Similarly, funds offered by Valkyrie, WisdomTree, and Hashdex remained stable. However, none of these funds reported positive inflows.
Bitcoin Price Drop Influences ETFs
The recent exit from Spot Bitcoin ETFs has been driven by the notable drop in bitcoin’s price. On Monday, the leading cryptocurrency fell to its lowest level in nearly six weeks, briefly dipping below the crucial $60,000 mark. Currently, Bitcoin (BTC) is trading at $60,719, marking a 3.36% decline in the last 24 hours, according to the CoinMarketCap.
Analysts believe this price correction stems from a significant announcement by Mt. Gox, the infamous crypto exchange that went bankrupt in 2014 after a series of devastating hacks. On Monday, Mt. Gox announced plans to distribute $9 billion worth of bitcoin and bitcoin cash repayments to creditors starting in July.
The announcement led to a “classic sell-the-news scenario”, as reported by Coinspeaker, causing investors to fear an influx of supply that could flood the market and lead to further price drops.
With Bitcoin’s price wavering and Spot Bitcoin ETFs seeing significant outflows, the Mt. Gox repayments are a wild card, and their impact on BTC’s price trajectory remains uncertain. Whether investors return or continue to be cautious will shape the market trend.