The US spot Bitcoin ETFs experienced a net outflow of $20.45 million on Wednesday. Interestingly, only two of them showed activity amid market uncertainty.
Grayscale’s GBTC saw a $26.99 million exit, while Fidelity’s FBTC gained $6.55 million. The remaining nine funds, including BlackRock’s IBIT, Bitwise’s BITB, and VanEck’s HODL, reported no flows.
US Bitcoin ETFs’ Market Momentum Wanes
According to data compiled by SoSoValue, trading volume for these 11 funds reached around $800 million on July 3rd, down from $995 million the previous day. This represents a significant decrease from March, when daily volume ranged from $8-$10 billion. Despite recent fluctuations, the ETFs have attracted a total of $14.62 billion in net inflows since their launch in January.
US spot Bitcoin ETFs kicked off July positively, recording their largest daily influx in almost a month on the first day, totaling $129 million. This aligns with historical patterns, showing that Bitcoin often begins in July with an upward trend. The fresh inflows were a positive sign after a tumultuous June that left Bitcoin ETFs bleeding.
But the subsequent dull flows have dampened investor hopes.
While July has historically been a stronger month for the world’s largest digital asset, the first week has been nothing short of turbulent. Bitcoin dropped to $56,770, a level last seen in February.
The recent price decline occurred after Germany’s government moved another batch of confiscated Bitcoin tokens. According to Arkham Intelligence, about $1,300 BTC, worth close to $76 million, was sent to three major exchanges – Kraken, Bitstamp, and Coinbase. An additional $99 million worth of Bitcoin was moved to a separate address identified as 139Po.
Moreover, whales are selling again. On July 4th, Spotonchain, an on-chain monitoring platform, observed a transfer of 1,700 BTC valued at over $99 million to Binance.
This activity indicated that these entities are taking profits. Furthermore, the timing of this move following Bitcoin’s recent price drop suggests it may be a risk mitigation strategy, likely aimed at reducing their Bitcoin holdings.
An Uptick in Bitcoin ETF Flows?
Despite the bleak picture, Bitcoin ETF flows might see an uptick.
In a statement to CryptoPotato, Bitfinex’s Head of Derivatives, Jag Kooner, said that an increase in ETF inflows could occur if market participants believe that “economic uncertainty will drive the Fed towards eventual rate cuts, enhancing the appeal of Bitcoin as an inflation hedge.”
“However, significant inflows would depend on broader market sentiment and risk appetite. Currently, however, we’ve recently seen quite underwhelming flows and a lack of ‘dip-buying.”
