Why are institutions suddenly dumping Bitcoin ETFs? What's the reason for the $1.2 billion outflow?

▲ Bitcoin (BTC) Exchange Traded Fund (ETF) ©Coinreaders

The U.S. spot Bitcoin ETF market experienced its strongest capital outflow in three months. As Bitcoin prices undergo significant volatility and institutional funds rapidly withdraw, concerns are growing in the market that “the short-term correction could be longer than expected.”

According to the cryptocurrency specialized media Bitcoinist on May 24 (local time), 13 types of U.S. spot Bitcoin ETFs recorded a net outflow totaling $1.26 billion last week. This is the largest outflow since the $1.49 billion net outflow recorded in the last week of January this year. Based on SoSoValue data, the spot Bitcoin ETF market has seen net outflows for six consecutive trading days recently, with 80% of the last 10 trading days being outflow days.

Specifically, on Monday alone last week, $648.64 million flowed out, marking the largest single-day net outflow since January 29. This was followed by net outflows of $331.05 million on Tuesday, $70.47 million on Wednesday, $100.82 million on Thursday, and $105.19 million on Friday. The market analyzes this as a result of both the weakening Bitcoin price and the simultaneous strengthening of institutional investors' risk-aversion sentiment.

Among individual ETFs, BlackRock's iShares Bitcoin Trust (IBIT) was hit the hardest. IBIT experienced a total net outflow of $1.01 billion last week. However, its cumulative net inflow still amounts to $64.77 billion, and its total net asset value remains at $61.09 billion, maintaining a dominant lead over competing ETFs. Fidelity's FBTC recorded a net outflow of $111.50 million, and Ark 21Shares' ARKB recorded a net outflow of $106.81 million.

In contrast, only Morgan Stanley's new ETF, MSBT, showed a positive trend, recording a net inflow of $1.11 million. Bitwise's BITB, VanEck's HODL, Valkyrie's BRRR, Invesco's BTCO, and Franklin Templeton's EZBC also recorded outflows ranging from $3 million to $10 million. Grayscale's GBTC and BTC, Hashdex's DEFI, and Bitwise BTCW showed a neutral flow with no net inflow or outflow.

The sentiment in the Ethereum spot ETF market was also not good. Last week, Ethereum spot ETFs experienced a total net outflow of $215.19 million, with capital outflows continuing for 10 consecutive trading days. The cumulative net outflow amounted to $471.10 million. However, Bitcoin rose 3.17% in one day to $77,013 at the time of writing, and Ethereum (ETH) also showed a short-term rebound, rising 4.44% to $2,118.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*