- Bitcoin ETFs shed $621 million worth of assets last week, following a week in which such funds gained nearly $2 billion.
- Overall, it’s a huge drop from the more than $2 billion worth of inflows seen the previous week, which was the best week for crypto ETP flows since March.
- MicroStrategy increased its planned raise to as much as $786 million, with the funds largely to be used to buy Bitcoin.
Bitcoin exchange-traded funds (ETFs) shed $621 million worth of assets last week, following a week in which such funds gained nearly $2 billion. This makes last week the worst for crypto ETP (including ETF) outflows since March.
Federal Reserve Stance Lowers Confidence
Investors appear to have lost confidence because of the dot plot, a collection of forecasts by the Fed presidents and governors. The plot now indicates that the Federal Reserve anticipates only one rate cut in 2024, not three as was forecast at the start of the year.
High interest rates are detrimental to risk assets like cryptocurrencies and equities, as fixed-income yield-bearing assets like treasuries provide investors a place to safely store their funds.
Bitcoin ETF Outflows
Bitcoin ETFs in particular saw net outflows of $621 million, while Ethereum, XRP, and Lido ETPs saw net inflows of $15 million, $2 million, and $1 million respectively.
Overall it’s a huge drop from the more than $2 billion worth of inflows seen the previous week. That was the best week for crypto ETP flows since March, and now it’s immediately followed by the worst during the same span.
US ETPs saw the highest net outflows of $565 million, while Germany bucked the trend with $17 million of net inflows.
Grayscale’s GBTC fund saw the highest outflow of $274 million, while Ark Invest and 21Shares ARKB fund witnessed an outflow of nearly $150 million.
Institutional Investor Response
Amid a turbulent week for crypto prices, Bitcoin exchange-traded funds (ETFs) gained nearly $2 billion worth of BTC deposits, according to a new report from CoinShares.
The price of Bitcoin plunged below $29,000 on Friday after previously stabilizing following hotter-than-expected jobs data from the US Labor Department. And as Bitcoin goes, so often too does the rest of the crypto market. All the while, Bitcoin ETFs were booming. Such funds collectively saw $1.97 billion worth of Bitcoin inflows last week.
Conclusion
The Federal Reserve’s hawkish stance has seemingly lowered institutional investors’ confidence in the markets, as evidenced by the major outflows from crypto ETFs last week. However, some firms like MicroStrategy are taking advantage of lower prices to accumulate more Bitcoin. The long-term impact remains uncertain.
