Digital Asset Inflows Surge, But Spot Bitcoin ETFs Lose Steam

Digital asset inflows into crypto investment products turned positive last week, with net inflows of $862 million. Bitcoin (BTC) led the inflows, aided by ETF demand, while Grayscale continues to see massive outflows. The selling pressure from ETFs is visible on the BTC price, which has dropped by $4,000 over the past 24 hours. The crypto market sentiment has turned bearish, with heavy put calls suggesting a pessimistic trader outlook.

Surge in Digital Asset Inflows, but Spot Bitcoin ETFs Lose Appeal

The cryptocurrency investment landscape has witnessed a significant shift in the past week, with digital asset inflows turning positive, reaching $862 million. This marked a notable reversal compared to the net outflows of $931 million recorded the previous week.

However, the popularity of spot Bitcoin exchange-traded funds (ETFs) has been on the decline. Daily trading volume of ETFs has plummeted to $5.4 billion, a sharp contrast to the peak of $9.5 billion observed in early March.

Bitcoin Leads Inflows, Grayscale Outflows Continue

Bitcoin (BTC) emerged as the top performer in digital asset flows, attracting $863 million in inflows. This surge was primarily driven by ETF demand, with spot BTC ETFs recording $1.8 billion in inflows, offsetting the $965 million in outflows experienced by Grayscale.

Grayscale, a prominent digital asset manager, has faced persistent outflows for nearly two months since the inception of trading for 11 spot Bitcoin ETFs in the United States on January 11th.

The relentless outflows from the Grayscale Bitcoin Trust (GBTC) have exerted significant downward pressure on the BTC price over the past three weeks.

ETF Outflows Weigh on BTC Price

Market analysts had anticipated that GBTC outflows would gradually decelerate and cease, fueling unprecedented demand for ETFs. However, investor behavior suggests that GBTC outflows are far from abating, as GBTC has dominated ETF flows in recent weeks.

The selling pressure emanating from ETFs has been evident in the BTC price, with the world's leading cryptocurrency losing $4,000 in value over the past 24 hours, hovering just above $66,000. Many experts view this as a routine correction ahead of the Bitcoin halving event scheduled for April 20th.

Bearish Sentiment Prevails

The BTC price correction triggered nearly $500 million in liquidations, while the options market witnessed a surge in put contracts, indicating a bearish sentiment among traders.

Ethereum Outflows Continue

Ethereum (ETH), the second-largest cryptocurrency, experienced its fourth consecutive week of outflows, amounting to $19 million during the past week. The altcoin market, however, recorded a net inflow of $18.3 million, with Solana (SOL) leading the charge with $6.1 million in inflows.

Regional Outflows

Regionally, the United States recorded the most significant outflow of $897 million, while Europe and Canada collectively saw $49 million in outflows.