US Bitcoin ETFs saw a decrease in net outflows of $20.45 million on Wednesday, with only two funds showing activity during market uncertainty. Grayscale’s GBTC experienced an exit of $26.99 million, while Fidelity’s FBTC gained $6.55 million. The remaining nine funds, including BlackRock’s IBIT, Bitwise’s BITB, and VanEck’s HODL, reported no flows.
Trading volume for these 11 funds reached about $800 million on July 3rd, down from $995 million the day before. This is a significant drop from March, when daily volume was between $8-$10 billion. Despite recent fluctuations, the ETFs have seen a total of $14.62 billion in net inflows since their launch in January.
July started on a positive note for US spot Bitcoin ETFs, with the largest daily influx in nearly a month on the first day, totaling $129 million. This aligns with historical trends, as Bitcoin typically starts July with an upward trend. The recent inflows were a welcome sign after a challenging June for Bitcoin ETFs.
However, the following days saw lackluster flows, dampening investor optimism. July, historically a strong month for Bitcoin, has been turbulent so far. Bitcoin prices dropped to $56,770, a level last seen in February.
The recent price decline can be attributed to Germany’s government moving a significant amount of confiscated Bitcoin tokens. Around $1,300 BTC, valued at close to $76 million, was sent to major exchanges like Kraken, Bitstamp, and Coinbase. An additional $99 million worth of Bitcoin was moved to a separate address.
Furthermore, whales have been selling again, with 1,700 BTC valued at over $99 million transferred to Binance on July 4th. This activity suggests that these entities are taking profits, possibly as a risk mitigation strategy to reduce their Bitcoin holdings following the recent price drop.
Despite the current challenges, there is potential for an increase in Bitcoin ETF flows. Bitfinex’s Head of Derivatives, Jag Kooner, mentioned that if market participants believe economic uncertainty will lead to rate cuts by the Fed, Bitcoin’s appeal as an inflation hedge could grow. However, significant inflows would depend on broader market sentiment and risk appetite.
In conclusion, while US Bitcoin ETFs have faced outflows and market uncertainty recently, there is still potential for a turnaround in flows if economic conditions and investor sentiment shift in favor of Bitcoin as a hedge against inflation. Investors should keep a close eye on market developments and whale activity to gauge the future direction of Bitcoin ETF flows.
