US Bitcoin ETFs Face Third Week of Outflows Amid Market Downturn

Based on data from Farside Investors, the US bitcoin ETF market has experienced significant withdrawals for three weeks straight, with a substantial $328 million in outflows last week. This recent trend underscores a downturn in what has been a booming sector. Grayscale’s Bitcoin Trust ETF (GBTC) witnessed the most substantial loss, with $454 million exiting between April 22 and April 26. This outflow highlights a considerable reversal for one of the previously dominant funds.

Major fund inflow streaks have also ended, notably for BlackRock’s iShares Bitcoin Trust (IBIT), which saw no new investments last Wednesday, Thursday, and Friday. Fidelity Investments’ Wise Origin Bitcoin Fund (FBTC) similarly faced its first days of outflows, losing $23 million and $3 million, respectively, on Thursday and Friday.

The collective inflows for other funds in the sector were not enough to offset GBTC’s losses, totaling only $126 million last week. This shortfall reflects a significant shift from previous inflow trends that had supported Bitcoin's price to new heights. Overall, bitcoin ETF outflows were more severe last week than in previous weeks. Earlier, $204 million was withdrawn, and the week before that saw $83 million in outflows. Trading volumes across broader crypto ETPs also declined, falling to $11.8 billion from about $18 billion. Despite the downturn, some experts remain optimistic.

Christopher Jensen from Franklin Templeton mentioned to Blockworks that there is still interest and ongoing investigations by various institutions into the crypto space, suggesting that the current flow reduction might not signify a long-term trend. This ongoing pattern in the ETF market indicates a cooling interest after a previously intense investment phase, which could potentially impact Bitcoin’s pricing and investor strategies in the future.