Bitcoin Suffers Massive Outflows Amid Crypto Market Uncertainty, Tops $284 Million
The recent unimpressive price action of Bitcoin is playing out in the minds of institutional investors, with recent data highlighting their bearish sentiment. This has led to a wave of massive outflows from Bitcoin investment products, which could negatively impact the flagship crypto.
Bitcoin Investment Products Record $284 Million Of Outflows
CoinShares revealed in a blog post that Bitcoin investment funds recorded an outflow of $284 million last week. Most of these outflows are said to have come from the US Spot Bitcoin ETFs, which saw outflows of $156 million last week. CoinShares noted that last week was the first time these funds recorded such a measurable amount of outflows.
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These US Spot Bitcoin ETFs indeed had a week to forget last week, as even BlackRock’s iShares Bitcoin Trust (IBIT) recorded its first day of outflows since launch, with almost $37 million exiting the fund.
CoinShares suggested that the magnitude of outflows was likely due to Bitcoin dropping below $62,000, which they estimate is the average purchase price of these ETFs since launch. Therefore, they claim that Bitcoin’s decline may have triggered automatic sell orders.
Before now, institutional investors had already shown mixed feelings towards these funds thanks to Bitcoin’s recent price action. As such, it makes sense that Bitcoin dropping below $60,000 made them panic sell instead of holding their positions.
Despite this development, CoinShares noted that the Spot Bitcoin and Ethereum ETFs in Hong Kong which launched last week, were a bright spot, recording $307 million in inflows in the first week of trading. The launch of these funds could prove timely, with Bitcoin needing a catalyst to continue its upward trend.
Interestingly, CoinShares revealed that Bitcoin was the only crypto asset to record outflows. On its part, Ethereum broke its seven-week streak of recording outflows, with $30 million flowing into Ethereum investment products. Other altcoins like Avalanche, Cardano, and Polkadot also saw inflows.
Spot Bitcoin ETFs Still Not In The Clear
With Grayscale’s GBTC recording its first day of net inflows last week, there was the feeling that such development could spark a turnaround in the outflows that the Spot Bitcoin ETFs have been recording. However, that hasn’t been the case. On May 7, these funds recorded a net outflow of $15.7 million.
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GBTC was again the primary culprit, with the fund seeing a net outflow of $28.6 million. These outflows have continued to affect Bitcoin’s price negatively, given the amount of selling pressure it is piling on the flagship crypto.
At the time of writing, Bitcoin is trading at around $62,300, down over 2% in the last 24 hours, according to data from CoinMarketCap.
