Bitcoin exchange-traded funds (ETFs) experienced an unprecedented shift on Monday, as investors pulled out a staggering $580 million in a single day.
This massive sell-off, the largest one-day outflow ever for Bitcoin ETFs, highlights the unusual volatility and cautious sentiment surrounding the cryptocurrency market.
The Fidelity Wise Origin Bitcoin Fund (FBTC) topped the outflows with $169 million.
Hot on its heels, ARK’s 21Shares Bitcoin ETF (ARKB) reported $138 million in outflows, marking a significant withdrawal from what has been a popular choice for crypto enthusiasts.
Other big players in the Bitcoin ETF space also felt the impact.
Grayscale’s Bitcoin Mini Trust (BTC) lost $89.5 million, and Bitwise Bitcoin ETF (BITB) followed closely with $79.8 million worth of outflows.
While these ETFs are usually steady, the sheer volume of investor withdrawals raises questions about where the market is headed and what factors might be influencing this investor shift.
Why are Bitcoin ETFs Losing money?
Apparently, these outflows are believed to be the result of Bitcoin ETFs not attracting as much fresh investment as expected.
Bianco argues that while the hype around Bitcoin ETFs has been substantial, actual inflows haven’t lived up to the fanfare, leaving prices relatively flat despite high interest from retail investors and crypto fans.
For example, BlackRock’s iShares Bitcoin Trust ETF (IBIT) stands out as one of the few ETFs that managed to attract new money during this slump.
On Monday, IBIT recorded $26 million in inflows, the only notable Bitcoin ETF to see positive numbers amid the large-scale sell-offs elsewhere.
This resilience suggests that IBIT may appeal more strongly to long-term investors or those with a greater risk tolerance.
Are Wall Street investors losing interest?
A recent observation from BlackRock executives adds an interesting angle to the conversation.
According to the investment giant, nearly 75% of Bitcoin ETF investments come from crypto-savvy retail investors rather than traditional Wall Street players.
This suggests that while crypto’s popularity has exploded among everyday investors, the mainstream financial world might still be holding back, contributing to the volatility we’re witnessing.
Ethereum ETFs join the trend
Bitcoin ETFs weren’t the only funds to experience turbulence. Ethereum-focused ETFs also reported significant outflows, albeit on a smaller scale.
Data shows that investors pulled roughly $63 million from Ethereum ETFs on the same day.
Grayscale’s Ethereum Mini Trust (ETH) saw $31.94 million in outflows, while the Fidelity Ethereum Fund (FETH) closely followed with $31.5 million.
This across-the-board drop in both Bitcoin and Ethereum ETFs signals a broad shift in investor behavior, possibly influenced by recent price dips.
Bitcoin, for instance, is currently trading at around $68,567 after briefly reaching $73,000 last week.
Despite high hopes for Bitcoin’s value to climb past its previous peak, the market correction appears to have dampened bullish expectations, at least temporarily.
