U.S.-listed spot bitcoin exchange-traded funds (ETFs) experienced significant net outflows of $200 million on Tuesday, marking the highest outflow since the $580 million recorded on May 1. This trend reflects a second consecutive day of outflows, driven primarily by Grayscale’s GBTC, as traders derisk ahead of crucial macroeconomic events.
Data from SoSoValue shows that these eleven ETFs collectively saw substantial outflows as traders likely reacted to the impending U.S. Consumer Price Index (CPI) report and the Federal Reserve’s rate decision. The sell-off led to Bitcoin briefly dipping to $66,200 before rebounding.
Grayscale’s GBTC was the major contributor, accounting for $120 million of the outflows. GBTC has consistently been the worst-performing ETF in terms of outflows since its inception in January, accumulating a total of $18 billion in outflows.
Other notable ETFs, including Ark Invest’s ARKB, Bitwise’s BITB, Fidelity’s FBTC, and VanEck’s HODL, recorded outflows ranging from $56 million to $7 million. None of the ETFs reported any inflows during this period.
Market analysts attribute these outflows to traders derisking in anticipation of the CPI reading on Wednesday and the conclusion of the Federal Open Market Committee (FOMC) meeting, which is expected to provide crucial insights into the Fed’s monetary policy.
“Markets are in risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Plot, indicating how many rate cuts the Fed anticipates for the rest of 2024,” stated Singapore-based QCP Capital in a Tuesday broadcast message.
Despite these short-term challenges, QCP Capital maintains a bullish long-term outlook. “We believe this could be an opportune moment to accumulate Bitcoin. Upcoming bullish events, such as the potential approval of an ETH spot ETF and the political jockeying between Biden and Trump for the crypto vote, bolster our optimism,” QCP added.
Additionally, Treasury Secretary Janet Yellen’s upcoming speech on Friday is anticipated to influence riskier assets like cryptocurrencies, potentially adding further volatility to the market.
