The outflow amount of U.S. Bitcoin spot ETFs reached a historic high of $1 billion in a single day, with net outflows exceeding $2 billion for six consecutive trading days. Analysts believe that institutional profit-taking, the exit of arbitrage trading, and changes in market risk sentiment are the main reasons. At the same time, Bitcoin has dropped below $90,000, affecting cryptocurrencies like Ethereum, casting a short-term shadow over the market.
**BTC ETF Sees Record Daily Outflow, 10 Funds Hit Hardest**
According to SoSoValue data, 10 out of the 12 U.S. Bitcoin spot ETFs experienced net outflows. Among them, Fidelity’s FBTC faced the largest outflow, with $345 million exiting in a single day, followed by BlackRock’s IBIT, which saw outflows of $164 million.
Other funds were also not spared, with Valkyrie’s BRRR experiencing an outflow of about $100 million, Bitwise’s BITB about $88.3 million, and Grayscale’s BTC about $85 million. Meanwhile, the ARKB fund, jointly launched by Ark Invest and 21Shares, has yet to disclose its fund flow data, suggesting that the actual outflow amount may be even higher.
This outflow record surpasses the previous high of $671 million set on December 19 of last year. At that time, Bitcoin’s price quickly retreated from an all-time high of $108,000, and this recent outflow has similarly coincided with a significant market decline, as Bitcoin’s price has now fallen to approximately $88,000, a low not seen since before the election of U.S. President Trump last year.
Additionally, this marks the first time that Bitcoin spot ETFs have faced more than $500 million in net outflows for three consecutive weeks, indicating a gradual loss of investor confidence.
**Institutional Profit-Taking Pressures Bitcoin Market**
In addition to Bitcoin, the overall cryptocurrency market is also facing selling pressure, with significant declines in major tokens such as ETH, XRP, and SOL. Peter Chung, head of research at Presto Research, pointed out that this wave of market decline is closely related to a decrease in risk appetite in the global financial markets:
“Bitcoin’s drop below $90,000 aligns with a broader trend of safe-haven trades, reflected in weakening Nasdaq futures, a strengthening yen, and robust yields on 10-year U.S. Treasury bonds.”
Chung further explained that traditional financial (TradFi) hedge funds have recently employed a significant amount of arbitrage trading strategies: “Buying Bitcoin ETFs while shorting CME Bitcoin futures to capture about a 10% spread.”
However, as the returns from this strategy have shrunk to 5%, many institutions have chosen to close their positions, which may trigger large-scale capital outflows.
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**Institutional Investors Adjust Strategies, Investors Remain Cautious**
Rachael Lucas, an analyst at BTC Markets, believes that multiple factors have contributed to the outflow of ETF funds, with institutional investors’ position adjustments being a key factor:
“Bitcoin showed strong performance at the beginning of 2024, prompting some investors to take profits. After such a significant rise, increased market volatility makes it natural for investors to lock in profits.”
Furthermore, macroeconomic factors are also affecting market sentiment, including uncertainties in U.S.-China trade relations and market expectations regarding the Federal Reserve’s interest rate policies, which have led investors to adopt a cautious stance towards potential rising capital costs.
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**Analysts: Liquidity Tightening, but Long-Term Outlook Remains Bullish**
As of now, the cumulative net inflow of U.S. Bitcoin spot ETFs has dropped to $38 billion, the lowest level this year, reflecting a contraction in market liquidity and an increase in volatility.
However, Lucas remains optimistic, believing that the supply reduction from the upcoming Bitcoin halving event will ultimately provide strong structural support:
“In the short term, the outflow of ETF funds may exert pressure on Bitcoin prices, but it will not fundamentally reverse the long-term trend, as Bitcoin’s price is influenced by spot demand, on-chain activity, derivatives market trends, and macroeconomic factors.”
**Risk Warning**
Investing in cryptocurrencies carries a high level of risk, and prices may be highly volatile, resulting in the potential loss of your entire principal. Please carefully assess the risks.