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Monday, June 17, 2024

Bitcoin Spot ETFs See Net Outflows After 19 Consecutive Days of Inflows

Bitcoin spot exchange-traded funds (ETFs) have experienced their first net outflows in nearly a month, marking a notable shift in market dynamics. According to Farside Investors, a total of 11 U.S. spot Bitcoin ETFs collectively witnessed a net outflow of $64.9 million, breaking a remarkable streak of 19 consecutive days of net inflows.

Major Outflows Among Bitcoin Spot ETFs

The Grayscale Bitcoin Trust (GBTC) recorded the largest net outflow of $39.5 million. Following closely behind was the Invesco Galaxy Bitcoin ETF (BTCO) with $20.5 million in net outflows. The Fidelity Wise Origin Bitcoin Fund (FBTC) also saw a minor outflow of $3 million. On the positive side, Bitwise and BlackRock’s ETFs reported modest inflows of $7.6 million and $6.3 million, respectively.

Impact on Bitcoin Price

These outflows coincided with a decline in the price of Bitcoin. Over the past 12 hours, Bitcoin’s value dropped from just above $70,000 to below $68,000, resulting in $170 million in liquidations and exerting downward pressure on the entire cryptocurrency market.

Previous Inflows and Record Highs

In the preceding week, Bitcoin spot ETFs consistently observed strong inflows, with net inflows recorded on each trading day. The total net inflow for the week amounted to approximately $1.83 billion, reaching levels of demand not seen since early March, according to Matteo Greco, a research analyst at digital asset investment firm Fineqia International. The cumulative net inflow since the inception of these ETFs has now reached a record high of about $15.7 billion.

Global Expansion of Bitcoin ETFs

The integration of Bitcoin into traditional finance is expanding globally. Following the launch of Australia’s first BTC spot ETF, the Thailand Securities and Exchange Commission (SEC) recently approved One Asset Management to introduce Thailand’s inaugural BTC spot ETF. This marks a significant step in the global adoption of Bitcoin ETFs.

Macroeconomic Factors and Central Bank Actions

On the macroeconomic front, both the Bank of Canada (BOC) and the European Central Bank (ECB) have cut interest rates by 25 basis points. Despite inflation levels surpassing the central banks’ 2% annual target, these rate cuts indicate governments’ optimistic expectations about their ability to manage inflation while implementing less restrictive monetary policies. Less restrictive monetary policies are generally favorable for risk-on assets, including stocks and digital assets like Bitcoin, particularly when rate cuts do not signal an imminent recession.

Upcoming Economic Indicators

Meanwhile, the U.S. Bureau of Labor Statistics is set to release May figures for its inflation-measuring Consumer Price Index (CPI) on June 11. Analysts have forecast inflation to rise 0.1% after a 0.5% bump in April, bringing the year-on-year figure to 3.4%. Core inflation is forecast to rise 0.3% in May, the same as April, according to Morningstar. The Federal Reserve’s monetary policy will also be decided at a two-day Federal Open Market Committee (FOMC) meeting starting the same day.

SEO Focus: Bitcoin ETF

Bitcoin spot ETFs have seen significant shifts recently, with net outflows marking a break in a 19-day streak of inflows. Major players like the Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) experienced substantial outflows, impacting Bitcoin’s price. Despite this, the global expansion of Bitcoin ETFs continues, with new approvals in Australia and Thailand. The evolving macroeconomic landscape, including recent central bank rate cuts and upcoming U.S. inflation data, adds further complexity to the Bitcoin ETF market. Stay updated on the latest developments in Bitcoin ETFs and their market impact.

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