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Fidelity Bitcoin ETF sees first daily net outflows since January listing

This surprising development may reflect changing investor attitudes toward the cryptocurrency market or ETF products specifically.

Date: 2024-04-29 Author: Łukasz Michałek
Fidelity Bitcoin ETF sees first daily net outflows since January listing

The Fidelity Wise Origin Bitcoin ETF (FBTC), a key player in the bitcoin exchange-traded fund (ETF) market, experienced a significant drop on Thursday, with its first day of net outflows since launch. It recorded a noteworthy outflow of nearly $23 million, a significant event in the cryptocurrency market.

This outflow trend, the first of its kind since its launch in January, had an effect beyond the Fidelity Bitcoin ETF. It has affected other significant funds in the cryptocurrency market, painting a broader picture of the current state of the market.

On the same day, well-known brands in the cryptocurrency market, such as ARKB ARK 21Shares, BRRR Valkyrie and BITB Bitwise, saw outflows of $31.3 million, $20.2 million and $6 million, respectively.

Surprise for the market

According to data from SoSoValue, the Fidelity Bitcoin ETF had an outflow of $22.61 million on Thursday. This departure from typical performance showed a change in investor sentiment in the Bitcoin market.

Franklin Templeton’s EZBC fund was the best performer among the funds affected by the losses, attracting net inflows of $1.87 million. However, Grayscale ‘s GBTC offset this positive momentum, recording a slight outflow of $139 million.

Analysts attribute the lack of significant fund inflows to the post-Bitcoin halving environment. Hong Song-uk, an analyst at NH Investment and Securities, stresses the need for events focusing attention on Bitcoin in the near future.

“There are no further events that will focus attention on Bitcoin in the near future,” – Hong said.

At the time of publication, Coinglass data revealed that some $58.2 million worth of Bitcoin had been liquidated in the past 24 hours, with long positions accounting for $35 million.

On Wednesday, the Fidelity Bitcoin ETF fund contributed $5.4 million to a total daily inflow of $9.8 million. On Thursday, BlackRock’s IBIT fund continued its trend of zero inflows, mirroring its previous day’s performance. Other funds with zero inflows on Thursday included BTCO Invesco, HODL VanEck, BTCW WisdomTree and DEFI Hashdex.

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Bitcoin outflow trends continue to rise

Bitcoin also saw significant outflows in theexchange-traded funds (ETFs) market in a recent SoSoValue report on April 17, particularly highlighted by Grayscale’s Bitcoin Trust (GBTC), which saw a net outflow of $79.38 million.

This contributes to GBTC’s historic net outflow of $16.46 billion . On the other hand, the BlackRock ETF IBIT fund recorded a net inflow of about $25.78 million, reflecting a divergent trend in investor sentiment.

Further analysis highlights the magnitude of outflows from GBTC, reaching as much as $643 million, while other ETF products saw modest inflows. On the other hand, while BlackRock’s 71-day streak of uninterrupted inflows is coming to an end, signaling a potential shift in the bitcoin market, turbulence is noticeable in the ETF market.

Preliminary data from Farside Investors shows a significant decline in the popularity of BlackRock’s IBIT. For the first time since launch, the fund has failed to attract new investments, which contrasts with the modest inflows seen in Fidelity’s FBTC and the ARK 21Shares Bitcoin ETF.

Meanwhile, Grayscale’s GBTC faced significant withdrawals, culminating in a net outflow of $120.6 million – the largest since April 17. Despite initial enthusiasm and large investments, sentiment toward bitcoin ETFs cooled this month, undermining previous momentum in the bitcoin market.

Hong Kong is preparing to launch Bitcoin and Ether ETFs by the end of April, aiming to challenge US dominance in the digital asset space, regulatory hurdles and competition with established US firms.

Moreover, while Fidelity’s Bitcoin ETF recently secured a record $40 million investment , concerns about low public participation in Bitcoin ETFs persist, underscoring growing institutional interest in Bitcoin along with challenges hindering wider ETF adoption.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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