Spot Bitcoin ETFs See Five Days of Outflows, Raising Concerns

Wall Street's spot bitcoin exchange-traded funds (ETFs) recorded a historic five consecutive days of net outflows, totaling $888 million, with Grayscale's GBTC leading the decline. Despite significant trading volumes, inflows remained weak, with Blackrock's IBIT and Fidelity's FBTC experiencing record-low inflows. Analysts suggest factors beyond price fluctuations, such as Genesis's trading activity, may have contributed to the outflows.

Are Crypto Traders Losing Interest in Spot Bitcoin ETFs?

Wall Street's spot bitcoin exchange-traded funds (ETFs) have reached a new milestone, but not in a good way. Despite hitting record highs, these ETFs have witnessed five straight days of net outflows, a concerning trend that could indicate waning interest from crypto traders.

Outflows Reach Unprecedented Levels

Over the past week, the ten ETFs collectively saw $888 million in outflows, with Grayscale's GBTC leading the charge on Monday, March 18, with a record-breaking single-day outflow. This five-day streak of net outflows is the longest yet, surpassing a four-day streak earlier this year.

Weak Inflows Compound the Problem

Adding to the concerns, inflows have been equally weak. Blackrock's IBIT, which dominates the market, saw a record-low $49.3 million in inflows on Wednesday, March 20, a record that was shattered on Friday with a mere $18.9 million. Fidelity's FBTC, the third-largest spot bitcoin ETF, also hit a record low this week, with only $2.9 million in inflows on Thursday, March 21.

What's Driving the Outflows?

While the outflows coincide with a dip in bitcoin's price, other factors may be at play. Bloomberg ETF analyst Eric Balchunas suggests that Grayscale's unusually large outflows could be attributed to trading by digital financial firm Genesis.

Trading Volumes Remain Strong

Despite the net negative inflows, trading volumes have remained significant, albeit slightly lower than recent weeks. According to The Block's data dashboard, the cumulative volumes of the spot bitcoin ETFs increased by about $22 billion over the past week, reaching a total of $164 billion.

Conclusion

The recent outflows from spot bitcoin ETFs raise questions about the sustainability of their growth. While price fluctuations may be a factor, other factors such as trading activity and investor sentiment also warrant consideration. It remains to be seen whether this trend will continue or if it is simply a temporary setback in the broader crypto market.