Summary: Investor interest in newly launched spot Bitcoin ETFs appears to be diminishing, as another $80 million net outflow was recorded yesterday.
A Shift in Investor Sentiment
Despite the initial excitement surrounding the launch of spot Bitcoin ETFs, recent figures suggest a cooling off of investor enthusiasm. Bloomberg’s latest reports highlight a substantial $80 million net outflow from these funds recorded on Thursday, continuing a trend of net withdrawals.
Wednesday’s Inflows Overwhelmed by Outflows
While Wednesday saw an inflow of approximately $270 million into Bitcoin ETFs, these gains were significantly overshadowed by the net outflows. When considering the withdrawals from Grayscale Investment’s Bitcoin ETF, the total net outflows reached around $153 million for the same day.
The Impact of GBTC’s ETF Transition
The Grayscale Bitcoin Trust (GBTC), which has been in operation for over a decade, recently transitioned into an ETF after receiving approval from the U.S. Securities and Exchange Commission. Since its changeover on January 11, GBTC has experienced a staggering $4.8 billion in withdrawals.
Bitcoin’s Value and Arbitrage Opportunities
Concurrent with these outflows, the value of Bitcoin has plummeted by approximately 20%. The conversion of GBTC from a closed-end trust to an ETF format has closed off what was once a lucrative arbitrage opportunity for investors, leading to a wave of sell-offs.
FTX Bankruptcy and Its Effects on the Market
The sell-off was further exacerbated by the liquidation activities tied to the bankrupt FTX exchange’s estate. This resulted in some of the highest daily outflows from the fund, peaking at $641 million on January 22. However, by January 25, the daily outflow had decreased to $394 million, indicating a potential stabilization in the market.
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