As the Bitcoin (BTC) price continues to hit lows, the spot Bitcoin ETFs in the US are witnessing major outflows for seven days in a row. On Monday, June 24, the total outflows across all nine spot Bitcoin ETFs was $174.5 billion, with none of the ETFs recording any kind of inflows. In the last ten days, the total outflows from the spot Bitcoin ETFs have exceeded $1 billion. This current sell-off clearly indicates that the early excitement around the launch of the spot Bitcoin ETFs seems to be waning, and Bitcoin institutional interest has been dropping with global market uncertainty. Last week, Bitcoin investment products registered $630 million worth of outflows.
A significant contributor to Monday’s outflows was Grayscale Bitcoin ETF GBTC, which recorded the most outflows at $90.4 million. This has brought the total outflows from GBTC since inception almost closer to $18.5 billion. Fidelity’s FBTC suffered the second-biggest blow with $35 million in outflows on Monday. Since mid-June, FBTC has been seeing consistent outflows with the Assets Under Management (AUM) dropping under $10 billion. While several other Bitcoin ETFs have also registered outflows, BlackRock’s IBIT hasn’t recorded a single outflow since its inception. However, there have been multiple instances of zero inflows recently.
Amid the current BTC price correction, there is a huge divergence with the US stock market, especially the Nasdaq index. Bitcoin kicked off the year 2024 with impressive gains following the launch of spot Bitcoin ETFs, but the Q2 has been more of a consolidation phase as the BTC price remains range-bound. Since mid-May, the NASDAQ has continued to show a steady climb, extending its year-to-date gains to more than 20%. This indicates that tech stocks have an edge over Bitcoin. For the Bitcoin price rally to continue, it needs a strong catalyst in the form of liquidity infusion. Any signal of a Federal Reserve pivot could lead to a strong reversal on the upside.
It is evident that Bitcoin has underperformed the US stock market, especially the NASDAQ index in recent times. Despite the early gains, Bitcoin is now range-bound while the NASDAQ has shown a steady climb with more than 20% returns year-to-date. This divergence in performance shows that tech stocks have been outperforming Bitcoin, which was initially supported by the launch of ETFs. For Bitcoin to continue its rally, it will require a strong catalyst in the form of liquidity infusion to signal a potential reversal on the upside. In the current market scenario with global uncertainty, Bitcoin institutional interest has been declining, leading to significant outflows from Bitcoin investment products.
