Bitcoin ETFs Witness Massive $900 Million Outflow

Bitcoin Exchange-Traded Funds (ETFs) have experienced significant outflows this week, totaling nearly $900 million. Grayscale Bitcoin ETF (GBTC) has been a major contributor to these outflows, with $14 billion leaving since its January 2024 launch. The outflows coincide with a pullback in Bitcoin (BTC) price and a broader crypto market crash. Despite the outflows, BlackRock's Spot Bitcoin ETF (IBIT) has seen minimal net inflows, mitigating some of the negative impact.

Outflows Galore: Bitcoin ETFs Hit by $900 Million Exodus

With a whopping $900 million disappearing from Bitcoin Exchange-Traded Funds (ETFs) this week, the question on everyone's mind is: What's going on? And who's responsible for this massive sell-off?

Spot Bitcoin ETFs: A Tale of Woe

Spot Bitcoin ETFs, which track the price of the digital currency in real time, have been hit particularly hard. Over $888 million has flowed out of these funds, with Friday alone witnessing a $51.6 million net outflow. Grayscale's Bitcoin ETF (GBTC) has been the biggest culprit, hemorrhaging a staggering $14 billion since its January 2024 launch.

GBTC's Persistent Pain

GBTC's woes continued unabated this week, with another $359 million outflow on Thursday, bringing the total for the week to a staggering $1.8 billion. On Wednesday, it suffered a single-day outflow of $386 million, a sobering reminder of its persistent struggles.

BlackRock's Bright Spot

Amidst the gloomy outflows, BlackRock's Spot Bitcoin ETF (IBIT) has emerged as a beacon of hope. Despite minimal inflows, it has managed to mitigate some of the negative impact on the market. Analyst Michael van de Poppe sees BlackRock's consistent inflows as a sign that institutional buying activity is still ongoing, suggesting that the market cycle is far from over.

Consecutive Days of Outflows

The pain didn't end there. Bitcoin ETFs experienced consecutive days of outflows, with Tuesday seeing a $326 million exodus. GBTC's woes persisted, with a massive $444 million outflow on Tuesday.

Institutional Caution

Institutional investors seemed cautious ahead of the Federal Open Market Committee (FOMC) decision on March 20, which reflected in subdued inflows across most ETFs.

Bitcoin's Price Volatility

Bitcoin's price has also been on a wild ride lately. After hitting an all-time high of $73,836 earlier this month, it plummeted to below $61,000 before rebounding back above $67,000. However, it has since retreated to the $65,000 level again.

Short Squeeze Relief

Amidst the volatility, Bitcoin has seen a short squeeze, with nearly $30.68 million in short liquidations out of a total of $48.31 million. This forced short traders to buy back their positions to mitigate potential losses, which could provide a temporary boost to the price. However, a massive correction could follow later.

Crypto Market Crash

The crypto market as a whole has also been in a downward spiral. Ethereum (ETH) has crashed below $3,200 from its recent high of $4092. Solana (SOL) has also taken a hit, slumping below $180 despite surging past $200 earlier this month.