Bitcoin ETF Inflow Streak Breaks With Nearly $80 Million Outflows In Sudden Reversal

Christian Encila

7 months ago

3 mins read

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The recent increase in the appeal of spot Bitcoin exchange-traded funds (ETFs) in the United States has temporarily ceased.

On Tuesday, these funds underwent a reversal, resulting in net outflows of $79.01 million, following an extraordinary seven-day streak of positive inflows. Farside Investors are the source of this data, a company that specializes in the analysis of ETF flows.

A Brief Obstacle

The $79 million outflow represents a significant shift in sentiment among investors who had previously demonstrated a strong interest in Bitcoin ETFs. Over the span of two days last week, the market attracted around $1 billion in inflows, implying a robust demand for these financial products.

The main cause of this negative change was Ark and 21Shared’s ARKB, which resulted in a substantial $134.7 million outflow.

BlackRock’s IBIT, the best-performing bitcoin ETF by net assets, drew $43 million. Fidelity’s FBTC and VanEck’s HODL, which received $8.8 million and $3.8 million, respectively, also helped. There were no new flows on the remaining eight funds, including Grayscаle’s GBTC, during the day.

Nevertheless, Bitcoin ETFs could bring in more than $21 billion to date. This number clearly signifies the rising use of Bitcoin as a new asset class and it is only going to see more hedge funds take larger positions.

US-traded spot Bitcoin ETFs have also seen significant interest from institutional investors, with 20% of the market owned by them as of October 22.

Institutional ownership of U.S. #Bitcoin Spot ETFs is around 20%, with asset managers holding 193K BTC (per Form 13F filings). pic.twitter.com/9YTOEH3G5w

— Ki Young Ju (@ki_young_ju) October 22, 2024

Institutional Demand Is Still Strong

Regardless, while the latest ETF flow swings have been significant in themselves, they can not distract from what is an ongoing push towards institutional Bitcoin adoption. Among the main companies who have made large investments in these funds are Goldman Sachs and Millennium Management.

The SEC’s approval of options trading on 11 Bitcoin ETFs will help investors manage their Bitcoin exposure, boosting interest.

Through more efficient position hedging made possible by options trading, investors can help to steady the market and lower volatility over time. Analysts argue that this would draw more institutional money to the industry, therefore supporting Bitcoin’s reputation as a credible investment tool.

BTCUSD trading at $67,156 on the daily chart: TradingView.com

Bitcoin ETF: Looking Ahead

Although outflows may cause concern, many analysts are positive about Bitcoin ETFs. Options trading’s SEC approval is a turning point that could improve market efficiency and liquidity.

More institutional players coming into the space are likely to change the dynamics. The current pause in inflows could be a temporary phenomenon only; investors are repositioning their strategies given the shift in market conditions.

The outlook for spot Bitcoin ETFs, looking into the long term, appears quite positive with the current uptick in adoption from the institutional space and trading of Bitcoin at or near three-month highs.

The recent outflows from spot Bitcoin ETFs may indicate a temporary setback; however, the prevailing trend of heightened institutional interest and regulatory support indicates that this asset class is here to stay. Investors will be intently monitoring the rapid evolution of this market for any new developments.

Featured image from The Rio Times, chart from TradingView

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

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