Bitcoin witnessed a 4.5% decline on Thursday, reaching a one-month low at $40,800, in tandem with the CoinDesk 20 Index, which reflects the performance of major cryptocurrencies and is down by 4.6% over the past 24 hours. The introduction of newly approved spot bitcoin ETFs on January 11 has resulted in a 13% decrease in the price of bitcoin, following a brief initial surge. Despite significant inflows into these spot ETFs, substantial outflows have occurred from not only Grayscale’s GBTC but also other global bitcoin-related ETPs.
In the first week of trading for spot bitcoin ETFs, data updated until yesterday indicates an addition of over 68,000 bitcoins by these new issuers. However, GBTC has experienced an outflow of approximately 40,000 bitcoins, resulting in a net increase of about 28,000 bitcoins across all bitcoin ETFs.
K33 Research Analyst Vetle Lunde emphasized that even before receiving regulatory approval in the U.S., various spot bitcoin products were actively traded globally. Currently, exchange-traded products (ETPs) worldwide hold over 864,000 bitcoins, putting into perspective the relatively modest addition from U.S. vehicles.
Lunde highlighted the significant outflows from Canadian and European ETPs alongside GBTC, suggesting that investors are taking profits or reallocating funds to more cost-effective U.S. ETFs. The ProShares Bitcoin Strategy ETF (BITO), a futures-based ETF with over $2 billion in assets under management, has no direct bitcoin holdings but constitutes 36% of bitcoin contract open interest at the CME Group’s exchange, according to Lunde. Together, futures-based bitcoin ETFs contribute to 48% of all bitcoin open interest at CME.
As BITO and other futures-based funds experience outflows, Lunde noted that they may need to sell their long positions in the futures market, potentially exerting additional downward pressure on bitcoin prices.