Bitcoin investors withdrew $635 million from U.S.-listed spot exchange-traded funds (ETFs) on Wednesday, marking the largest single-day outflow since late January. This significant withdrawal comes as Bitcoin’s price struggles to maintain momentum, recently dipping below the critical $80,000 mark.
After experiencing a surge that pushed Bitcoin’s value from $65,000 to over $80,000, the cryptocurrency has faced a downturn, currently trading around $79,400. Analysts attribute this decline to renewed inflation concerns in the United States, despite the Nasdaq and S&P 500 indices reaching new highs.
The recent outflow from the 11 spot Bitcoin ETFs, which had previously attracted $3.29 billion in investments during March and April, is indicative of a broader trend. Over the past five trading days, these funds have seen total withdrawals of $1.26 billion, reducing their net inflows since their January debut from $59.76 billion to $58.5 billion.
Market observers note that the $635 million outflow is particularly concerning given the bullish sentiment surrounding earlier inflows. Adam Haeems, head of asset management at Tesseract Group, stated, “A persistently hot CPI, an incoming Fed under Warsh that markets read as more hawkish, or another oil shock can compress bitcoin even with positive net flows.” Tesseract manages over $500 million in assets.
While the relationship between ETF flows and Bitcoin’s price has become less predictable, the recent large withdrawals cannot be overlooked. A correlation study indicates that the connection between Bitcoin’s price changes and ETF inflows has weakened significantly, with the 90-day rolling Pearson coefficient dropping from 0.68 in February to just 0.16 now.
This suggests that daily ETF flow movements may not provide reliable indicators of Bitcoin’s price direction. Nonetheless, significant redemptions like Wednesday’s still hold weight in the market.
Bitcoin ETFs faced a major outflow of $635 million, the largest since January, as Bitcoin's price fell below $80,000. Analysts link the downturn to inflation concerns, indicating a complex relationship between ETF flows and Bitcoin's market performance.