Fidelity’s FBTC, not GBTC, took the lead in outflows on Wednesday, signaling a potential concern for bullish investors.
BlackRock’s IBIT experienced its inaugural day of outflows, with $36.9 million exiting the fund. Following suit, Fidelity’s FBTC witnessed the largest outflows, shedding $191 million, trailed by GBTC, ARKB, and IBIT.
Federal Reserve Chair Jerome Powell’s dismissal of a rate hike as the next move spurred a brief uptick in BTC prices. However, investors exhibited a rush to offload U.S.-based spot bitcoin exchange-traded funds (ETFs) at an unprecedented rate on Wednesday, despite Powell’s statements.
The 11 ETFs collectively saw a net outflow of $563.7 million, the largest since their inception on January 11, extending a five-day losing streak. Data from Farside Investors and CoinGlass revealed that investors have withdrawn nearly $1.2 billion from these ETFs since April 24. Notably, Wednesday marked the first-ever outflows from BlackRock’s iShares Bitcoin Trust (IBIT), with $36.9 million exiting the fund.
Fidelity’s FBTC led the outflows, experiencing withdrawals of $191.1 million on Wednesday. This trend may be unsettling for bullish investors, as FBTC and BlackRock’s IBIT had consistently attracted funds in the first quarter, offsetting the frequent outflows from the relatively expensive Grayscale ETF (GBTC).
On the same day, GBTC saw the second-largest outflow of $167.4 million, followed by ARKB’s $98.1 million and IBIT’s $36.9 million. Despite Powell’s dovish approach providing support to risk assets, including bitcoin, other funds also experienced outflows.
During Wednesday’s press conference, the Fed kept the benchmark interest rate unchanged between 5.25% and 5.5%, in line with expectations. Powell emphasized the strength of the economy, dismissing concerns about renewed rate hikes or liquidity tightening spurred by recent disappointing inflation figures. Additionally, the Fed announced plans to significantly reduce its quantitative tightening (QT) program starting June. Simultaneously, the U.S. Treasury unveiled a program to repurchase billions of dollars in government debts, marking the first such initiative in over two decades to enhance liquidity in the bond market.
Bitcoin, like other risk assets, responded to anticipated changes in liquidity conditions, briefly rallying from $56,620 to $59,430 following Powell’s remarks. The yields on the 10- and two-year Treasury notes, along with the dollar index, experienced declines.
However, BTC’s rebound was short-lived, with bitcoin retracing to $57,300 at the time of writing. The debut of Asia’s first spot bitcoin and ether (ETH) ETFs in Hong Kong earlier in the week, accompanied by disappointing volumes, further dampened sentiment in the crypto market.
