By
Godfrey Benjamin
June 28th, 2024
After four consecutive days of outflows, Tuesday, June 18th marked a new low point.
The spot Bitcoin ETF market, which once enjoyed massive investor interest from all sides, has suddenly been slowing down. After four consecutive days of outflows, Tuesday, June 18th marked a new low point as none of the major spot Bitcoin ETFs saw any inflows. Rather, they saw a combined outflow of $152 million, raising concerns about investor sentiment towards Bitcoin and its exchange-traded fund counterparts.
Fidelity, Grayscale Lead with the Biggest Outflows
Fidelity‘s FBTC and Grayscale‘s GBTC, the top two spot Bitcoin ETFs in terms of market share, were the main contributors to the outflows. FBTC recorded an outflow of $83 million, while GBTC followed closely behind with $62.3 million, leaving the fund. This trend of investor withdrawal has caused the total assets under management for spot Bitcoin ETFs to drop to $14.7 billion, down from its peak earlier this year.
Together, BlackRock and Fidelity control a major portion of the spot Bitcoin ETF market, with their combined Bitcoin holdings exceeding those of major corporate player MicroStrategy. However, despite this dominance, a closer look paints a more detailed picture of how investors engage with these funds.
According to BlackRock’s Chief Investment Officer, Samara Cohen, a large portion (nearly 80%) of Bitcoin ETF purchases have been from individual investors. While hedge funds and brokerages have shown some buying interest, registered investment advisors remain cautious. Their hesitation border on factors like Bitcoin’s volatility, its young history as an asset class, and regulatory uncertainties around it.
Selling Pressure on Bitcoin Price, But Australia Offers Hope
The recent outflows, which are mainly due to waning investor interest, have put downward pressure on the Bitcoin price. As of publication, BTC was seen hovering around the $65,000 mark. That is according to CoinMarketCap data.
In other news, Australia has recently launched its spot Bitcoin ETFs. Notably, these ETFs have bucked the trend, reportedly seeing inflows, however little. Clearly, it might be too early to know if the inflows are a result of first-timer hype or that investors in the region are merely approaching ETFs a little differently.
Overall, the slowdown in spot Bitcoin ETF inflows, particularly in the United States, reflects a shift in investor sentiment. While the market holds promise, concerns about volatility and regulatory uncertainties remain ever present.