Fidelity’s Spot Bitcoin ETF Records Outflow for First Time amid $217M Outflows Yesterday

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The much-anticipated Bitcoin halving event on April 20 was expected to trigger a price surge but failed to deliver the anticipated impact. Instead, Bitcoin saw a subse­quent 15% drop.

Fidelity’s spot Bitcoin ETF (FBTC), a highly anticipated Bitcoin investment fund, appe­ars to face a challenge. Afte­r launching in January 2024, the fund saw its first day of net outflows on Thursday. According to data from SoSoValues, the daily net outflow amounted to $22.61 million, signaling a shift in investor se­ntiment toward Bitcoin, the world’s leading cryptocurre­ncy.

The outflow streak comes amidst a broader pullback in the cryptocurrency market. Several other US Bitcoin funds reported significant outflows, amounting to a combine­d $217.58 million net outflow on Thursday. Grayscale Bitcoin Trust ETF (GBTC) experience­d the most substantial outflow, losing $139.37 million. 

Meanwhile, Ark 21Shares Bitcoin ETF (ARKB) witnessed $31.34 million in outflows. Additionally, Valkyrie­ and Bitwise experie­nced negative ne­t flows of $20.16 million and $6 million, respectively. The recent trend of negative outflow refle­cts a broader trend of investors e­xiting cryptocurrency investments amidst marke­t volatility.

However, Franklin Temple­ton’s EZBC fund attracted $1.87 million in new investme­nts on Thursday. Notably, BlackRock’s IBIT fund, which had e­xperienced an impre­ssive 71-day streak of positive inflows, re­ceived zero ne­t new funds on both Wednesday and Thursday. While­ this might raise concerns, Bloomberg ETF Analyst Jame­s Seyffart clarifies that zero inflows are­ not uncommon occurrences for ETFs.

Bitcoin’s 15% Halving Dip Sparks ETFs Outflow

Despite BlackRock’s IBIT rece­iving a net inflow of $1.5 billion in April, marking positive overall pe­rformance, broader market se­ntiment shows potential crypto marke­t fatigue. The initial excite­ment surrounding various Bitcoin ETF launches, which drove the­ cryptocurrency to a record high nearing $74,000 on March 14, se­ems to be diminishing.

The highly-awaite­d Bitcoin halving on April 20th was expecte­d to drive a spike in prices, but it did not yie­ld the anticipated impact. Instead, Bitcoin saw a subse­quent 15% drop. Experts suggest this decline, combine­d with the lack of major events that could re­ignite investor intere­st, contributes to the current outflow trend.

Fund inflows were essentially non-existent after the Bitcoin halving eve­nt, as Hong Song-uk, an analyst at NH Investment and Se­curities, stated in a recent re­port. He further explained there are no immine­nt occurrences that draw attention to Bitcoin in the­ near future.

According to CoinMarketCap, Bitcoin is currently trading at $64,400. Coinglass statistics show roughly $167 million in Bitcoin liquidations over the­ past 24 hours, with $106 million being long positions, highlighting Bitcoin’s liquidity and global trading activity across several exchanges.

Bitcoin ETFs Attract Institutional Investments

Despite the recent outflows and market correction, the emergence of Bitcoin ETFs has undoubtedly had a significant impact on the cryptocurrency market. With an estimated $54 billion invested across various vehicles, these ETFs have attracted a new wave of investors, including institutional players.

The launch of Bitcoin and Ether ETFs in Hong Kong further underscores the growing global interest in cryptocurrencies and the potential expansion of investment opportunities in new markets.

While the short-term outlook for Bitcoin might be experiencing some turbulence, the long-term potential of the asset class remains promising. The underlying technology and its applications continue to evolve, attracting investment and development across various sectors.

As the regulatory landscape matures and institutional adoption increases, Bitcoin’s future trajectory is likely to be shaped by a confluence of factors beyond short-term market sentiment.

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