Bitcoin Spot ETF's 10-Day Consecutive Outflow Ends… 'BlackRock IBIT Variable' Still Remains

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

U.S. spot Bitcoin ETFs have turned to net inflows, ending a massive 10-consecutive-trading-day outflow. However, with funds still flowing out of BlackRock's IBIT, the industry's largest product, analysis suggests it is too early to say that institutional investor sentiment has fully recovered.

According to cryptocurrency market data aggregator CoinMarketCap on July 3 (local time), U.S. spot Bitcoin ETFs recorded a net inflow of $221.7 million on July 2, ending a 10-consecutive-trading-day net outflow streak totaling $2.73 billion. This is the largest daily net inflow in the past two months. Bitcoin rebounded to approximately $61,700 from a low point below $58,000, influenced by weakened expectations for additional interest rate hikes by the Federal Reserve (Fed) as U.S. non-farm employment in June increased by only 57,000.

However, the industry remains cautious despite this net inflow. The biggest reason is that BlackRock's IBIT, a leading product in the industry, recorded a net outflow of $40.43 million on this day. In contrast, Fidelity's FBTC recorded a net inflow of $165.96 million, Ark Invest's ARKB $91.84 million, and VanEck's HODL $4.35 million, driving the overall fund inflow. Industry analysts believe that only when IBIT, considered a key indicator for institutional investors, turns to net inflow can this rebound be considered a genuine trend reversal.

IBIT accounted for most of the total ETF fund outflow, with 35,980 BTC, approximately $2.24 billion, flowing out over the past 10 trading days. The cumulative net outflow for U.S. spot Bitcoin ETFs this year also amounts to approximately $5.4 billion. However, the recent reduction in IBIT's daily outflow from the previous level of $100 million to $400 million to $40.43 million is interpreted as a sign that selling pressure is gradually easing. Additionally, the fact that long-term holders' spot buying absorbed ETF selling volume, preventing Bitcoin from further plummeting below $58,000, was also considered a positive factor.

The market considers IBIT's fund flow to be the most crucial variable going forward. If ETF fund inflows continue for several weeks and IBIT also turns to net inflow, the cumulative net outflow this year is likely to gradually decrease, confirming the return of institutional funds. Conversely, if IBIT's fund outflow continues or if the ETF net inflow proves to be a temporary phenomenon, this rebound may remain a limited technical recovery.

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