March 26, 2024

Spot Bitcoin ETFs Experience Historic Week of Outflows, Shedding $890 Million

Institutional bitcoin outflows hit a five-day streak, driven by substantial GBTC sales.

Last week marked a significant downturn for spot bitcoin ETFs, as heavy outflows from the recently converted Grayscale Bitcoin Trust outweighed inflows into newly launched funds.

Bitmex Research data reveals an unprecedented streak of net outflows totaling $887.7 million from spot bitcoin ETFs spanning March 18 to March 22. Notably, March 19 recorded a record outflow of $326.2 million, gradually diminishing to $51.6 million by March 22.

This milestone occurred amidst a volatile period for bitcoin and the wider crypto market, with bitcoin plummeting almost 12% from $68,900 to a low of $60,800 within the same timeframe.

ETF analyst James Seyffart from Bloomberg attributes the bearish flows in spot bitcoin ETFs to Gemini Earn's offloading of GBTC shares. These shares, previously utilized as loan collateral by Genesis, a now insolvent centralized lending platform, were granted permission by a U.S. court on Feb. 17 to be offloaded by Gemini.

Glassnode, an on-chain analytics firm, published a recent blog post suggesting that the market dynamics of spot bitcoin ETFs could overshadow the forthcoming fourth quadrennial halving event for Bitcoin. According to Glassnode, the substantial buying power of ETFs is poised to outweigh the traditional supply squeeze anticipated from the halving, necessitating traders to balance historical halving impacts with contemporary ETF influences on bitcoin availability and price.

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